Adam Ingram: We continue to make good progress with the US to ensure that the UK's military and industrial requirements for the joint strike fighter programme will be met. In the last 10 days, there have been no fewer than three meetings on those very issues with the Senate Committee on Armed Services, involving the Secretary of State and my noble Friend Lord Drayson, the Minister for Defence Procurement. One took place in Washington and two in London. Following those discussions, we remain optimistic that we will be in a position to sign a production, sustainment and follow-on development memorandum of understanding in December, as planned.

Adam Ingram: I would love to be able to enlighten my hon. Friend, but no final decisions have yet been made on the points that he has raised.

Michael Jack: On the basis of a briefing that I received from our embassy in Washington, may I record my appreciation for what Lord Drayson has done by way of representation on Capitol hill?
	While the Minister pursues his objective of ensuring that the memorandum of understanding is signed in November, what steps are being taken to bring the armed forces committee and the House of Representatives on side? They appear still to be the ultimate logjam.

Sarah McCarthy-Fry: Does the Minister agree that the decision by the United States to cancel the development and construction of the second engine, apart from delivering a blow to British jobs, was a shortsighted decision? In creating competition by developing two engines, we could have driven down costs in the whole project, and secured a better engine design.

Liam Fox: I am sure that the Minister would agree that the JSF is the best aircraft for the roles that are currently envisaged, and that defence technology transfer should not be an issue, given the intelligence co-operation and nuclear weapon technology exchange between the UK and the US. Does he also agree that failure could drive the UK into further European procurement that is not, in this instance, in the strategic interests of either the UK or the United States?
	Does the Minister understand the fears of the United States about the leakage of defence technology? Would he care to reflect on the damage done by today's news that 41 German companies are being investigated over sales of equipment and technology to Iran for potential use in its nuclear programme, and the impact that that will have on Capitol hill?

Adam Ingram: I thank the hon. Gentleman for his efforts, particularly during his visit to Washington, in trying to ensure that we do what is required to take this programme forward. We have made it clear that we want to win the contract on the proposed basis and we are making every effort to achieve that. The US Administration—and, indeed, beyond that—well understand the strength of our case, but it does not help to point out that other nations are allegedly involved in things that they should not be doing, as such a claim has been the basis of press reports. Clearly, there are some concerns within the US about this matter. As I said in my earlier answer to the hon. Member for North Devon (Nick Harvey), the issue will be settled on the basis of the good relationship that exists between very close allies and partners. If we struck the deal that we want, I am sure that every aspect would be honoured on both sides of the relationship.

Don Touhig: Our success in prosecuting and winning the last war was the result of the whole nation's efforts, and I am sure that the whole House recognises that. Our responsibilities, however, relate to those who served in His Majesty's armed forces at the time. That is why the veterans badge is awarded in the way that it is. I am aware of the contribution of the Bevin boys, the land army and others and I understand that some people believe that they should also qualify—a matter for my ministerial colleagues in other Departments as well as myself—but I certainly share the sentiment behind the hon. Gentleman's point.

Don Touhig: I am of course familiar with the case that the hon. Lady mentions; she has corresponded with me about it and I have answered some of her questions. I do not doubt her commitment to her constituent and the hard work that she has done on this issue, but I suggest that she looks at her website, on which she says that one of her priorities is opposing the Government's "damaging" house building plans. Well, we have to have houses to house people in the first place; nevertheless, she makes an important point. [Interruption.] If the hon. Lady will listen, I will give an answer. We have been working across the board to try to deal with these issues but as she knows, questions of housing priority are often a matter for local housing authorities. The council in the area represented by my right hon. Friend the Minister of State gives housing priority to those who have served in the armed forces, and I urge councils throughout the country to think on that.

John Reid: I offer my condolences to the family and friends of Corporal Mark Cridge who died last week in Afghanistan. I have today learned of another fatality in Afghanistan, believed to be a road traffic accident and my thoughts are also with his family and friends—as, I am sure, are the thoughts of the whole House.
	We are in Afghanistan under United Nations Security Council resolution 1623 and at the invitation of the democratically elected Government to prevent that country ever again reverting to being a haven for terrorists, by helping the Afghan people build their own democracy, security and legitimate economy.

John Reid: First, I thank the hon. Lady for her shared condolences for Corporal Cridge and his family and the family of the second deceased to whom I referred.
	We are in Afghanistan for a clear reason: to assist the people of Afghanistan to build their own democracy, security and economy, thereby preventing the country from falling back under the heel of the Taliban and the terrorists since it was from there that the worst-ever terrorist atrocity was launched. I fully accept that it is more dangerous in the south than anywhere else that we have been present hitherto, but whatever the dangers, they are less than the danger of the Taliban and the terrorists taking over Afghanistan again, which would be a danger to not only our forces but the people of that country.
	I apologise if I have given the hon. Lady wrong information and will check immediately after Question Time and write to her again. From memory, I am not aware of the specific details of the letter, but I shall check the position and rectify it as necessary.

Adam Price: Yesterday, the international security think-tank the Senlis Council reported that millions of pounds of compensation promised by British officials to farmers in the Helmand province has not been paid. Some 400 cheques, drawn on a British Government account, have even bounced because of insufficient funds. Does the Secretary of State accept that the resultant damage to goodwill in the province will make the British deployment in Afghanistan even more difficult and dangerous than it could have been?

John Reid: What I do accept is that if part of the building of a legitimate economy is the interdiction of an illegitimate economy—the production of opium and narcotics—it must be accompanied by some alternative income and livelihood for the farmers. What I do not necessarily accept are the views of the group to which the hon. Gentleman referred. As he will know, it campaigns for the legitimising of the production of opium and drugs on the grounds that they could be used for medicinal purposes. That is something that we have considered, but we do not believe that it is viable in the present situation in Afghanistan. More importantly, the Government of Afghanistan do not believe that that is viable. We must be a little careful about accepting the assertions of people who have an agenda to promote. They are entitled to promote it, but we are entitled to regard it as incompatible in the present situation.

Owen Paterson: As president of the Ellesmere cadets, I wholeheartedly support the cadets and their expansion into state schools—something that the Chancellor said in February that he wanted to take place. How and when will that happen, and who will pay?

Brian Jenkins: I have in my constituency TS Fort Grange, with 66 youngsters on the books and a waiting list—of course, the RAF and the Army have similar story—but does my hon. Friend recognise the fact that the biggest stumbling block that cadet forces come up against relates to adult civilian volunteers? How can we hope to expand the scheme, which I would love to expand, if we cannot find ways to encourage more adults to help those youngsters in a very important part of their development?

Don Touhig: I cannot give the hon. Gentleman the precise figures to breakdown the £95 million that we give to our cadet forces. I am conscious of the various ways in which we raise funding for the cadet forces. That is somewhat haphazard and we should look at it. I am exploring one or two ideas of my own, and perhaps we can consider better longer-term funding by which the cadet forces might be able to apply to a trust of some sort, so that we could ensure that they have a proper stream of funding. I do not underestimate the great work done by the cadet forces—I pay tribute to them for it—and I am conscious of the fact that we have a responsibility to ensure that they are properly funded. I am actively looking at ways to try to improve that.

Don Touhig: I am in the happy position of being a Minister who has money to give away. I want to make sure that more and more veterans organisations apply for funding from the challenge fund. Indeed, I spoke at the veterans forum only last week and urged more organisations to apply. I hope that hon. and right hon. Members on both sides of the House will recognise the important contribution that the challenge fund makes. There are funds available and I urge Members to look for opportunities for organisations that support the veterans agenda in their constituencies to bid for funding. The number to ring is 0800 1692277 or they can write directly to me and I will give them the address.

Don Touhig: Yes, of course I will. Indeed, I invite colleagues on both sides of the House to come forward with ideas. If we are able to provide support and encouragement, and even help to look for some funding, we will certainly do that. We want the day to be an annual commemoration and celebration of veterans. I pay tribute to the organisation to which my hon. Friend refers. If he would like to get in touch with me directly, I will do everything that I can to help the commemorations and celebrations in his constituency.

Patrick Cormack: Is veterans day going to be a public holiday, and if not, why not?

Don Touhig: Let me make it clear that an extensive and robust evaluation process is in place to examine the bidders that seek to win to defence training review programme. The recommendation will come to me later than I had anticipated, and it is more likely that a decision will now be announced in October. However, I want to make it clear that that will be open and transparent. There is an independent evaluation at every stage of the operation, and I want everyone to be assured that the decision will be taken in the best interests of defence training and the best interests of Britain plc.

John Bercow: The Minister's reply to my hon. Friend the Member for Kettering (Mr. Hollobone) was insubstantial and unsatisfactory. The period of time between infantry deployments is three months shorter than the publicly stated target of the Ministry of Defence. That must have some impact. What quantitative or qualitative assessment has the hon. Gentleman made?

Don Touhig: The shortness of the answer does not in any way undermine its quality. I hope the hon. Gentleman accepts that. However, I will take his point on board and further consider his comments and those of the hon. Member for Kettering (Mr. Hollobone). If appropriate action is needed in terms of writing to them, then I will certainly do that.

Ashok Kumar: I thank the Secretary of State for that reply. I praise the Government for their efforts in building relations between Britain and India. Our relationship is the strongest that it has ever been, certainly in all the years of my adult life. Given that the declaration was agreed nearly 18 months ago, what real progress has been made between us and India on defence co-operation?

John Reid: I would not accept the description of a policing role, although my hon. Friend is correct in that I did make the point that we are not in Afghanistan primarily to wage war or to search for and destroy terrorists. Rather, we are there to act as a protective military force, protecting not only ourselves but the Afghan Government and those working with them to build their economy, their democracy and their security.
	I should make the point that there are two elements to our force protection. The first is our force configuration—including air mobile components and Apache helicopters deployed for the first time in action—which was specified by our chiefs as the necessary one to defend our forces. Secondly, we are of course not going into the south of Afghanistan alone: to the east of us will be about 2,500 Canadian troops; and to the north in Oruzgan province there will be 1,400 Dutch troops, several hundred Australians, and Estonians and troops from the Afghan national army. There are around 9,000 troops there, and although I do not for one moment belittle the difficulties and dangers of deployment to the south, I am satisfied that, subject always to preliminary operations of our forces on the ground and what they discover, we have the configuration necessary to protect our troops.

Geoffrey Clifton-Brown: The Secretary of State has set out this afternoon three rather general aspirations that the deployment of our troops and NATO troops to Afghanistan is supposed to support, namely, promotion of democracy, economic infrastructure building and poppy eradication. Will he, perhaps by way of written answer, set out more detail on those three aspirations so that the House and the country at large can judge whether they have been achieved?

Adam Ingram: What I was going to say was that "fit for purpose" means that there are a number of helicopters that are just short of attaining that, and one has to look at fleet availability in the round. In terms of what is required, the capability will be there and it will be sustained. Let us be clear, the Apache attack helicopter, which is a very important force, will play its part in Afghanistan if it is called upon to do so.

Adam Ingram: I know that my hon. Friend takes a close interest in the matter, and I am only too aware of his constituent's age. The board of inquiry into the Challenger incident made recommendations in eight specific areas, including operational doctrine and training and procedures, and they have all been accepted and followed up. However, on the issue of combat identification, it takes time to ensure that there is interoperability and compatibility between allies. If we develop new technical solutions to deal with the problem, we must ensure that they stand the test of time, are robust and meet specific needs. Anyone who understands the issue, as my hon. Friend does, knows that it is not just about technical solutions but about situational awareness and dealing with the human factor. Lessons on training and approach have had to be learned from the tragic incidents that have taken place, and they will clearly help us to improve in all those areas.

Laurence Robertson: I thank the Secretary of State for his reply, but the whole House will find depressing. It has been said in Iraq at a senior level that if
	"this is not civil war, then God knows what civil war is."
	The Secretary of State disagreed with that comment, and he has access to far more information than I do. However, it is fair to say that the situation for our troops in Iraq is dangerous. Can he not give the House any further assurance than the answer that he has just given?

John Reid: First, on the question on the situation in Iraq, it was not I who denied that there was a civil war in Iraq but everyone to whom I spoke, including President Talabani, Prime Minister Ja'afari, the Foreign Minister, Defence Minister Delami, Al-Hakim, the head of the Supreme Council for the Islamic Revolution in Iraq, Tariq Al-Hashimi, the leader of the Sunni Iraqi Islamic party and, indeed, Ayad Allawi himself in private on the very day that he said something different in public. I have only conveyed the position presented to me by politicians from a range of backgrounds. Nevertheless, the point is not to argue about the definition of a conflict but to accept that as a result of deliberate provocation and the terrorists' intentional aim to provoke a civil war that is neither imminent nor inevitable there has been an increase in sectarian killings leading to a situation that no one can regard with complacency.
	In that situation, as regards British troops and the area under our control, less than 3 per cent. of the terrorist attacks are carried out in our four provinces. Indeed, 14 out of the 18 provinces of Iraq are relatively unscathed by terrorist attacks. That is not to diminish the significance of the four areas where there are such difficult attacks. Today, again, we have seen some of the horrendous consequences of that. Finally, rather than be divided by the provocation of sectarian violence, the best thing the Iraqi politicians could do is what they are doing: come together in unity to form a Government of national unity. That should give heart to us all.

John Reid: On the first point, I can do no better than repeat what I have said before about the linkage of the bombs that have in recent times been discovered in the south of Iraq. We believe that they are linked through Hezbollah to Iranian influence, though we have no concrete evidence that they are linked to the Iranian Government. The Iranian Government deny such linkage and we have made it plain that there should be no role for any country bordering on Iraq other than to support the democratically elected Iraqi Government.
	On the hon. Gentleman's second point, I can give an assurance, as I have done all along and did again today, that we will hand over to the Iraqis when the conditions on the ground permit. We will not stay one day longer than we are needed and wanted by them, but we will not leave one day too early against their wishes or under threat. The only thing that is achieved by continuing terrorist activities is to delay the day that the multinational forces withdraw, not to expedite it.

James Paice: I remind the House of my entry in the Register of Members' Interests, and I thank the Secretary of State for her answer. In a newspaper produced by the Department for Environment, Food and Rural Affairs which landed on the doorstep of every farmer in the country just six days ago, the headline stated, "Full payments on track for farmers". I hope that the Secretary of State is ashamed that that happened.
	As the Secretary of State has rightly said, the first priority in this debacle is to get the money to the farmers who desperately need it. Tens of thousands of decent hard-working family farmers were promised their payments, which in many cases cover up to one third of their income. In time they will need to stop relying on such payments to support their businesses, but this is the first year of painful transition. Will the Secretary of State tell us how many payments will now be made by the end of March? Exactly when will all the outstanding payments will be completed? What is she doing about all the non-validated entitlements, and will she confirm that they will be paid on the same time scale? Will she consider making an interim payment for everyone who cannot receive the full amount by the end of March? That could be done manually, even if the computer cannot cope. The delays are costing the industry £10 million to £12 million a month. Will the Government repay the interest on any related loan until the RPA issues the payment? Will the Secretary of State seek a derogation from the EU to delay the 15 May deadline for next year's applications? The RPA should not be sending out next year's forms instead of last year's money.
	We also need to know how the crisis arose. Given the continuing mapping problems and other issues, the crisis was obvious to us all, yet throughout those months the Government told us that we were scaremongering and that the targets would be met. In January Lord Bach told the Oxford farming conference that 96 per cent. of payments would be made by the end of March. In the same month, the Environment, Food and Rural Affairs Committee report stated:
	"The Committee is dismayed at the complacency of Defra Minister, Lord Bach, who refused to admit that any mistakes had been made or that anything could have been done differently to avoid the problems."
	Lord Bach called that report "shoddy" and said:
	"I am deeply disappointed with the timing of this report which could create unfounded alarm and uncertainty in the farming community."
	On 2 February the Secretary of State told this House that the 96 per cent. target would not be met. Three days later, Lord Bach told me in a letter that he still expected "the bulk of payments" to be made, although he went on to tell Farmers Weekly that "the bulk" meant more than 50 per cent. Just a month ago the Secretary of State told the National Farmers Union conference:
	"Having demonstrated last week that its systems are working as planned, the RPA is now in the process of authorizing payments".
	That is some plan!
	If Ministers were misled by the chief executive of the RPA it is right that he should go, but that does not absolve Ministers from this catalogue of incompetence and ministerial denial. This House and the industry are entitled to an apology, because the chain of accountability reaches the top. It was the Secretary of State who decided, rightly, to introduce a complicated hybrid scheme, but then opened it up to 48,000 new applicants, with 360,000 new parcels of land that had not previously been receiving support. Then, to make it worse, she rammed it into place in the first year of the three-year window—and that is where the problem began. But even Germany and Denmark, which also have hybrid schemes, paid almost all their farmers months ago.
	Sacking a civil servant is not the end of the matter. Ministers knew that there was a problem because they reduced the targets, but they appear to have done nothing until I challenged the Prime Minister two weeks ago. What questions were asked? How many Ministers actually went to the RPA to see what was happening? Did nobody have the gumption to ask why farmers were reporting so many problems? The Government's usual "blame somebody else" line will not wash. Lord Bach criticised others for saying what was abundantly clear to everybody, but he was wrong. A Minister who truly had his finger on the pulse of farming would have seen this coming and prevented it from happening. He has lost all credibility in the industry for which he is responsible, and he should go. This House and, more importantly, the farming industry deserve better.

Christopher Huhne: The Secretary of State talks about using up margins of contingency, but surely there is no way of describing the matter other than as a botched introduction of the single farm payment scheme in England. That is worrying for many tens of thousands of farmers who rely on the payments for their cash flow, and for maintaining their obligations.
	I have no doubt that there were problems at the Rural Payments Agency of which Ministers were not aware. There can be no other explanation for the extraordinary contrast between the assurances of the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for South Dorset (Jim Knight) at Question Time on 9 March and the sacking of the RPA chief executive only a week later. However, DEFRA Ministers must take their share of the blame.
	First, Scotland and Wales have almost finished payments on the simpler historic basis, yet DEFRA Ministers decided to implement the more fancy scheme and they must surely bear responsibility. Do they accept that their decision to abandon the historic basis of payment has been a major cause of the difficulties in England in comparison with the relative success in Scotland and Wales?
	Secondly, the new scheme could have been introduced with a delay, as happened in the Netherlands. Do Ministers accept that they made a mistake in trying to run before they could walk?
	Thirdly, do Ministers accept that the scheme's implementation has been botched from the start, and that the evidence for that is not only in the delays that farmers are now suffering in the payments that they were promised but in the spiralling cost—from £18.1 million to £37. 4 million, as revealed by the Select Committee—of the IT system procured for the single farm payments?
	The Secretary of State has given no assurances about the timing of the payments that are due. We must press her for assurances for farmers who expected the bulk of the payments to be made by the end of March about when they will be made. If she cannot give them, will Ministers authorise interim payments so that farm businesses can maintain their obligations to their suppliers and creditors? Will Ministers assure us that they have contacted the principal lending institutions to the farming community and accepted full responsibility for any delays in farmers' payments that may arise through DEFRA's broken promises?

Margaret Beckett: The hon. Gentleman drew on the experience of Scotland and Wales, and he is right to say that they have adopted a different system—although initially they made partial payments, and I am not certain whether Scotland is yet making full payments. Wales has begun to do that. However, those systems are not only different but involve a much smaller number of claimants. The hon. Gentleman described the scheme that we introduced in England as "more fancy"; a more accurate term would be "more sustainable".
	The hon. Gentleman spoke as if it would always be better to pursue the historic system. He is new to the portfolio and will not therefore have the subject at the front of his mind, but under the historic system, people continue, now and for the future, to be paid on the basis of what was received by someone farming the same land between 2000 and 2002. That appeared to be neither beneficial in driving farming forward to be receptive to the market, nor something with which taxpayers or farmers would be content for long. There are already rumblings in member states that have maintained the historic system about how unsatisfactory it is. This is not, therefore, a simple black-and-white question of why we did not do what it is claimed would be easier.
	The hon. Gentleman made a further point, and I was not sure whether it was based on information from the Select Committee report. If it was, I regret that. There is a misunderstanding that the cost of the information technology system is somehow evidence of things going wrong. The RPA was already set to undergo a programme to provide it with new IT. That was the £18 million scheme that was initially intended to be put in place. However, that was agreed before the common agricultural policy reform proposals, which obviously resulted in the need not only for a new IT system but for one that would perform a different task. That is why there is a difference, and the two sums involved are not comparable. We are not talking about twice the money for the same scheme changes.
	The hon. Gentleman also asked about interim payments. I can only repeat what I said earlier to the hon. Member for South-East Cambridgeshire (Mr. Paice), which is that we continue to keep that matter under review. I shall not be drawn into making forecasts, other than to draw attention to the scale of the payment window. The hon. Member for South-East Cambridgeshire referred to the speech that I made to the National Farmers Union annual conference, at which I said that payments had begun to flow on 20 February—as they had—and that I had been advised that very shortly, some £350 million would already have flowed.
	When I saw the chief executive of the RPA on the evening of 14 March, however, he told me that only about £60 million had been paid by that date. That was the first intimation that DEFRA Ministers had had that those were the figures involved. However, that sum was disbursed over about three and a half weeks. In the period since that date—just over a week of payment days—some £75 million has already been disbursed. That is obviously not enough, but it is certainly a big improvement on the previous figures.

Paddy Tipping: The Secretary of State has made it clear that she regards the situation as unsatisfactory. Will she assure the House that the right approach is being taken in moving away from production subsidies to payments for public goods? Is not the important thing now to ensure that farmers and landowners have a good idea of the new timetable for when payments will be made before June?

Michael Jack: In the light of the fact that the Select Committee, which I have the honour of chairing, has twice warned of the potential failings of the RPA and its computer system, may I seek an assurance from the Secretary of State that all reasonable requests from my Committee for full disclosure of information about this debacle, this failure of communication between officials and Ministers, will be complied with in any subsequent inquiry that we might hold to try to unearth what has caused this complete mess?

Margaret Beckett: I always listen with great care to the right hon. Gentleman's observations, and frequently find great wisdom in them. I assure him that one of the reasons why Ministers decided to commission a long-term review of the RPA—although we had not announced it—was our considerable concern that although there is no doubt that the organisation is customer-focused in that the staff care about their customers and are working hard and trying to do their best, its systems are not remotely customer-focused. That is one of the issues that I hope that we will address, perhaps even in the short term.

Margaret Beckett: I assure the House, and the right hon. and learned Gentleman, that that is being carefully considered. He will understand that there is no wish to do anything that will disrupt the likelihood of the majority of payments going out. I have instructed the acting chief executive that the large number of people who have an almost minuscule entitlement—on the whole, new claimants—should not be his priority. In far as possible, he should perhaps worry slightly less about some of those for whom the level of the payment might not be a matter of immediate desperate concern. The whole focus of the RPA's attention should be on those who need the money, about whom the whole House is concerned.

Ian Davidson: Can the Secretary of State tell the House what steps are being taken to reduce the welfare dependency that seems to be exhibited by many farmers? Does she agree that we have not seen the Tories so excited for quite a long time, and that only when they are trying to get their snouts and those of their friends in the trough do we see them so motivated?

Margaret Beckett: My hon. Friend has long been a critic of the system of farm support that has existed in this country. I know of his concern for ordinary people facing difficulties, however, which he will extend to people in any circumstances. In the longer term, the purpose and effect of the overall reforms of the common agricultural policy introduced in 2003 will be to link farmers more closely to the market and, as my hon. Friend the Member for Sherwood (Paddy Tipping) said a few moments ago, to put public money in payment for public good—things that the market will not reward.

Margaret Beckett: The hon. Gentleman can tell them that a bold move was made in the 1980s: the setting up of such things such as agencies, which are at one remove from Government and carry out executive tasks. It is an agency that is carrying out this work.

Anne McIntosh: I refer to my entry in the Register of Members' Interests. The Secretary of State will wish to apologise for the full answer given by the Minister with responsibility for farms, the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for South Dorset (Jim Knight) at Environment, Food and Rural Affairs questions on 9 March. He has apologised to me in person, but for the benefit of the House it should be placed on the record that his answer was incorrect and misleading in every particular. He said on 9 March that most of the payments had been made and that Scottish and Welsh farmers had been paid in full, when in fact no payments had been made to English farmers. Will the Secretary of State take this opportunity to show her awareness of, and willingness to take action on, two related issues? The market in England has been distorted, in that Scottish and Welsh farmers have the cash in hand to pay more for farm animals than English farmers can possibly pay. Secondly, tenant farmers are suffering particular hardship because they have no assets against which to borrow.

Margaret Beckett: It was graceful of the Under-Secretary, my hon. Friend the Member for South Dorset (Jim Knight) to say what he did to the hon. Lady—outside this Chamber, no doubt—but knowing her as I do, I am sure that she is not implying any wrongdoing on his part.

Geoffrey Clifton-Brown: I have repeatedly asked the Secretary of State questions about this issue at Environment, Food and Rural Affairs questions, and I am not a bit surprised at the muddle that she finds herself in. Will she undertake to come to the House in a month's time to give us an update—and so that she does not have to eat further helpings of humble pie, will she guarantee that all valid claims will have been paid by then, or if that it is not possible, that a substantial amount will have been paid on account? Finally, I should have declared my entry in the Register of Members' Interests before asking this question.

Jack Straw: Let me try to rattle through that long list of questions. On Belarus, the statement of conclusions spells out that the EU will be considering restrictive measures against those responsible. I cannot anticipate precisely what will be decided, but there could be a range of measures, including travel bans and asset freezes. As the right hon. Gentleman said, it is a disgrace that Belarus remains a dictatorship—the last in Europe—and it cannot continue in that way.
	On Gibraltar, both the joint statement between the Chief Minister of Gibraltar, Peter Caruana, QC, and myself—a copy of which will be in the Library—and my written ministerial statement make clear the position in respect of sovereignty, which is that sovereignty remains British as long as the people of Gibraltar wish it to do so. Should they change their minds about that, which I do not anticipate for a second, the provisions of article 10 of the treaty of Utrecht would apply.
	The right hon. Gentleman asked me about a new round of talks on Iran. There are in hand arrangements that we are trying to make for a meeting of the five permanent members of the UN Security Council and Germany later this week. Of course, I will inform the House once those arrangements are firm.
	On aid and funding to Hamas, I have nothing further to add from what we discussed in First Order questions. The quartet statement earlier in the year set out three principles that we expect Hamas to follow. At the same time—this is an issue for the whole House—we are wrestling with the need to ensure that the people of the occupied territories are not punished, by being deprived of humanitarian aid, for a vote that they freely and fairly exercised in elections that were regarded as free and fair. That is something that we have to work through.
	On economic reform, the right hon. Gentleman asked me about the comment made by my right hon. Friend the Prime Minister at the time of Lisbon. As a matter of fact, I do think that Lisbon has involved a sea change in EU thinking. It is true that the sea is very large and rather thicker than the sea that we are used to and the tanker of the EU is so big that it takes some time to turn round. However, let us take the example of better regulation. Until two or three years ago, the European Commission was simply a machine for producing more and more regulation. The right hon. Gentleman asked me about conversations that I have had with commissioners and others. I have had endless conversations. When I first got this job, I tried to have conversations about ending gold-plating in the Foreign Office and doing the same in Brussels and it was as though I had said something indecent, but these days things are changing. Under Günter Verheugen, the commissioner with responsibility for better regulation, there has been a big change. Some 68 pending items of legislation have been withdrawn. There is a rolling programme to repeal, codify, recast or modify 228 further pieces of legislation and more than 1,400 related legal acts over the next three years, and much else besides.
	On science, it is important to recognise that up until about 1997—I choose that date with care—the Government's record on investment in science was lamentable, but my recollection is that scientific investment has almost doubled since then. We will see the effect of that flowing through into research and development more widely.
	On services, the right hon. Gentleman asked me about the country of origin. It has been replaced by the country of destination principle. Personally, having considered the matter pretty carefully, I am not sure that the country of origin principle was worth dying in a ditch for and I think there are advantages to the country of destination principle. There are no proposals for an EU energy regulator and no changes to the treaty base.
	I was very tactful when I discussed our old friend the EU constitution with EU colleagues at a dinner on Thursday night. I repeated the comment that I made in the House a few weeks ago that it was, at best, in limbo. I drew attention to the fact that, at the time at which I said that, I understood that limbo could not take place until one was dead, but was not aware that His Holiness the Pope had abolished limbo in the meanwhile.

Keith Vaz: I pay tribute to the Foreign Secretary, the Prime Minister and the Minister for Europe on their work in pushing forward the economic reform agenda. In response to Opposition Members, let me say that Lisbon was different because it set out benchmarks for the first time. The Foreign Secretary will know that, according to the Centre for European Reform, Britain has done extremely well against those benchmarks. Is he confident, however, that our European partners have learned the lessons of the Kok report, because many of them are lagging well behind on them? May I also welcome the establishment of the European Research Council and offer Leicester or Blackburn as a possible home?

Jack Straw: We are doing a great deal. In fairness to President Barroso, he does not need much encouragement, as the Commission have made it clear that the rising tide of protectionism is against EU policy and law, and not remotely in the interests of the European Union. We must try to ensure that there is greater political consensus to challenge the rising tide of protectionism, which masquerades as economic patriotism.

Phil Woolas: With permission, Madam Deputy Speaker, I would like to make a statement on council tax for 2006–07 and the action that the Government propose to take with regard to local authorities that have set excessive budgets.Figures released today show that, excluding the council tax element of the funding package for the 2012 Olympic games, the average council tax increase in England for 2006–07 is 4.2 per cent. With the council tax element of the Olympics, it is 4.5 per cent.
	We have a mature working relationship with the Local Government Association. We have worked with the LGA to look at the pressures that councils face in the next two years, and how central and local government can manage those pressures. Under the settlement for 2006–07, which the House approved on 6 February, total support for local government, including specific grants, will rise by 4.5 per cent. compared with 2005–06. That includes an extra £305 million above previous plans. The provisional settlement for 2007–08 will provide an increase of a further 5 per cent., with £508 million above that previously planned. By introducing multi-year settlements, we are enabling authorities to plan ahead more effectively in budgeting for service delivery. We have now provided a framework for authorities to deliver effective local services over the next two years that takes account of the pressures that those authorities face.
	By 2007–08, Government grant for local services will have increased by more than the rate of inflation for 10 years in succession. That represents an increase of 39 per cent. in real terms since 1997. It can be compared very favourably with a real-term reduction of 7 per cent. in the four years up to 1997. I also remind the House of the council tax support that the Government provide to those on low incomes. Indeed, 14 per cent. of total council tax is paid through council tax benefit. Nobody who is unable to pay is made to pay, and we are working to ensure that all who are eligible do claim the benefit.
	Given our significant extra investment of grant, and the continuing scope for efficiency savings, we made it very clear again this year that we expected authorities to budget prudently. It was only with the greatest reluctance, following the 12.9 per cent. rise in council tax in 2003–04, that we first made use of our reserve capping powers. However, as we said in our 2005 election manifesto, we will use capping to protect council tax payers from excessive increases. There can be no doubt that the recent, more modest increases in council tax could not have occurred without the Government making judicious use of those powers.
	When we announced the provisional settlement in December, we said that we expected the average increase in council tax in England to be less than 5 per cent. for each of the two years 2006–07 and 2007–08. I set that out in a letter to all authorities. Ministers later wrote to those authorities reported to be considering setting increases of more than 5 per cent. I also wrote jointly with my right hon. Friend the Minister for Policing, Security and Community Safety to all police authorities reaffirming the Government's expectations.
	I am pleased to report that the overwhelming majority of authorities have responded positively to our messages. Most authorities fully recognise the need to minimise the demands that they place on council tax payers. Regrettably, however, a very small number of them have set excessive budget and council tax increases, and it is for that reason that I am making a statement to the House today about the action that we propose to take.
	I should like to remind hon. Members of the provisions of the capping legislation set out in the Local Government Finance Act 1992, as amended by the Local Government Act 1999. In order to determine whether each authority's budgeted expenditure as defined in the legislation is excessive, we must compare the authority's budget requirement for 2006–07 with that of the previous year. The legislation also allows us to determine other principles, such as the level of increases in council tax.
	This year, the increase in budget requirement for authorities providing education, police and fire services is measured using the alternative notional amounts given in the "The Limitation of Council Tax and Precepts (Alternative Notional Amounts) Report (England) 2006/07", which the House approved on 6 February. Alternative notional amounts are notional figures used for capping purposes to help give a like-for-like comparison of budget requirements between years.
	Our view is that authorities' 2006–07 budgets are excessive if they show, first, an increase of more than 6 per cent. in budget requirement compared with 2005–06, and, secondly, if council tax has increased by more than 5 per cent. in the same period. As was the case in 2005–06, a single set of principles has been applied to all authorities.
	Despite the principles being more stringent than in 2005–06, when authorities' budgets were judged excessive if they showed an increase of more than 6 per cent. in budget requirement compared with 2004–05 and if council tax had increased by more than 5.5 per cent, we are proposing to take action against only two unitary authorities this year, compared with 2004–05, when we took action against 14 authorities, and 2005–06, when we took action against nine authorities. The two authorities in question are Medway borough council and York city council, which have both set excessive budgets according to the principles that I have described. We are writing to those authorities today, informing them of our decision to designate them with a view to capping them in-year, and notifying them of the maximum budget that we propose to set for them.
	The authorities have a statutory right to challenge the proposed caps, and they have 21 days in which to do so. If they want to challenge, we will carefully consider the information that we have required them to send us, along with any other representations they make, before we take final decisions. We will then either make an order, to be approved by this House, designating the authorities at the level of the proposed maximum budget or another level, or we will withdraw the designation and nominate them instead. Nomination would allow us either to set them notional budgets for 2006–07 for future capping comparisons or to cap them in advance for 2007–08.
	Two shire districts, Aylesbury Vale district council and Wellingborough borough council have also breached the limits. However, as they have done so by very small amounts—only 12p and 9p respectively in terms of band D council tax—we are not proposing to take action against them. We have always made clear our reluctance to take capping action, because these are powers of last resort and we would prefer not to have to use them, but the public have a right to be protected from excessive council tax increases.
	Under our wider localism agenda, we are giving local authorities more freedom over how they deliver services. However, that must be set within a framework of prudent financial management and value for money. The vast majority of authorities—99 per cent.—have responded well to our clear message for council tax in 2006–07, and no one would have been happier than me if the figure had been 100 per cent. However, we remain committed to taking action against those increases that we believe to be excessive.

Eric Pickles: I thank the Minister for sending me an advance copy of his statement. That is much appreciated and entirely in line with the courtesy that we have come to expect from him. I also thank him for delivering it almost a month earlier than expected. I hope that that sets a precedent and that, in future, we can see statements in plenty of time for the local elections.
	The Minister talked about the amount of extra resources that he claims to have put into local authorities. Can he put a figure on the extra burdens that have been placed on local authorities? That would be interesting to know.
	The figures released represent an 84 per cent. increase in council tax in the period since Labour came to office. From 1997 to 2006, the average council tax on band D properties has soared to £1,268—the equivalent of £106 a month. It is a measure of how great is the council tax burden that the current increase is £4 short of being the fourth largest increase that this Government have made in the course of their massive increases in council tax. The current increase is £5 more than last year's increase. The Minister can talk in terms of percentages, but £54 is a lot for a hard-working family. As the Chancellor might say, in his own inimitable way, "We have had increases of £59, £50, £49, £54, £75, £126, £65, £47 and £54, making a total increase of £579 since Labour came to power"—although he would probably have rattled through it much more quickly. That represents a considerable burden on hard-working families.
	But one section of the community faces increases of more than £54 on this year's bill—pensioners, who face an increase of £254. Where does the Minister seriously expect pensioners just above the benefit level to find an extra £254? Can he explain why the £200 pensioners' payment has mysteriously disappeared this year? Last year, when council tax had increased by £525 since 1997, the Government felt that pensioners needed extra protection. This year, it has increased by £579 since 1997, so why do they now feel that pensioners no longer require that protection? The House can only draw the conclusion that that money was a cynical election bribe.
	I have heard the Minister express concern that council tax might be a tad regressive, but are not the current figures taking his case to the extreme? When a billionaire donor to the Labour party faces an increase of £54—perhaps a bit more in other bands—and a pensioner just above the benefit level faces an increase of £253-plus, is there no better indication of the true state of the Labour party? Aneurin Bevan and Keir Hardie must be turning in their graves. This is a complete sell-out of pensioners.
	Not only did I get the statement in good time, but I have also had the benefit of the Minister's press release, courtesy of "Gallery News". In it, he makes the most extraordinary statement, which I note that he did not repeat on the Floor of the House. For the benefit of colleagues, it says:
	"Labour councils are once again leading the way. Labour councils cost on average £190 less than Tory controlled councils and £96 less than Lib Dem councils."
	What is the basis for those figures? Surely they are not the discredited figures that do not take account of the relative property values of traditional Labour and Conservative authorities. Surely they are not the discredited figures that rely on Labour authorities having a lower valuation than Conservative authorities. Surely they are not the figures that no one else uses because they fail to convey a fair picture. That marvellous set of accounts and such creative accountancy show that the Minister for Local Government is wasted in his job. He should be a fundraiser for the Labour party.
	If we use the comparison on band D that the rest of the country and the House of Commons Library uses, we realise that Conservative councils charge £81 a year less than Labour-controlled councils and £88 a year less than Liberal Democrat councils, despite the fact that Labour has fiddled the grant to give more money to its councils. As the independent Audit Commission put it,
	"grant redistribution . . . led to some councils putting up council tax more than others. We found a clear association between the size of grant increase a council received and their increase in council tax."
	Yet Conservative councils still manage to charge lower council tax. The figures that the Minister produced are the clearest manifestation that Labour is in retreat and being pushed into its heartland.
	The Minister made some announcements about capping. After last year's fiasco, when re-billing cost more than the money saved, he again targets minnows. Both authorities have increases in absolute terms that are below the average increase. The Minister appears to be blinded by percentages and to have forgotten that people pay in pound notes.
	In Medway, a Conservative-controlled council, this year's increase is £50, which is a 5.5 per cent. increase. That is £4 less than the average council tax increase. In York, a Liberal Democrat-controlled council, this year's increase is £49 or £5.5 per cent. That is £5 less than the average. Yet the Minister does not seem to be obsessed by percentages when it comes to his friend—and the Standard Board's friend—Mr. Ken Livingstone. The Greater London authority's increase, before the addition of the Olympic precept, is 5.5 per cent.—exactly the same figure as Medway and York.
	Medway and York are capped because they have introduced increases that are below the average. Let us contrast that with three other councils. Oldham's increase for band D is £59, that of Hartlepool is £57 and that of North Tyneside is £55. What makes those increases acceptable to the Minister? Why is the highest band D council tax in the country levied in Sedgefield, at £1,490? It has a Labour district council, a Labour county council and, at least for now, a Labour Member of Parliament. Cannot the Minister speak to that spendthrift Member and try to ensure that people in Sedgefield get a fairer deal?
	Every year, the council tax increases. Every year, despite fiddled figures and grant, and wishful figures provided by the Minister, Labour's tax burden increases and it digs itself further into a hole over council tax. In some parts of the country, Labour will face the consequences in May, but in most parts, the poor council tax payer must face those consequences.

Phil Woolas: First, I thank the hon. Gentleman for his kind initial remarks. Let me deal with his points in the order that he raised them. On extra resources, we have a mature working relationship with the Local Government Association that allows us to make a serious analysis of the pressures that councils say that they face. I have made it clear that the new burdens principle will be implemented, but on the basis of net rather than gross new burdens, and on a shared understanding and analysis of those pressures.
	We believe that the exercise leading up to the two-year settlement satisfied the Local Government Association's major recommendations, either by establishing self-funding regimes in the case of fees—particularly in regard to licensing—or by providing the extra resources that we were able to announce in the settlement. I notice that the hon. Gentleman did not welcome that extra money but, shucks, I guess I will just have to live with that.
	The hon. Gentleman said that council tax had gone up by 84 per cent. I said in my statement that the 12.9 per cent. increase some years ago had been unacceptable. It is also true that significantly more resources had been given to local councils in that period. I also mentioned the 39 per cent. real-terms increase in Government support for local authorities.
	The hon. Gentleman asked about the £200 assistance for pensioners, but he failed to mention two important points. One is that about 14 per cent. of council tax is now paid through council tax benefit, and that people on full pension credit pay no council tax at all. All right hon. and hon. Members would like to see 100 per cent. take-up of council tax benefit, and I would ask Conservative Members to join us in encouraging that take-up, as many Conservative-run local authorities already do. Secondly, the hon. Gentleman ignored the other help that pensioners receive.
	The hon. Gentleman's fifth question was about billionaires. I feel that it is only right to ask him what is the Conservatives' actual policy on a property tax. I must remind the House that this property tax—the council tax—was introduced by the Conservatives, and we all remember the circumstances in which that happened—[Interruption.] Well, I have asked before in the House about their policy on a property tax. Do they have a commitment to a property tax or do they not? They introduced the eight bands in 1991. It would be perfectly possible for them to put a proposal to Sir Michael Lyons' inquiry for an increase in the number of bands, so as to include a billionaires' band. Perhaps they should propose that, but I suspect that they will not.
	I cannot accept the hon. Gentleman's accusation that the grant system is politically biased. That is not borne out by the facts, the figures of the House of Commons Library, or the representations that have been made to the Under-Secretary of State, Office of the Deputy Prime Minister, my hon. Friend the Member for Poplar and Canning Town (Jim Fitzpatrick) and other ministerial colleagues. The hon. Member for Wigan (Mr. Turner) is not in his place, but if he were, he would be reading out statements from the special interest group of municipal authorities—SIGOMA—many of which are floor authorities. It is a bit rich of the hon. Member for Brentwood and Ongar to make such an accusation, which I deny outright. Indeed, having studied the formulae and the method of grant distribution in detail for nearly 12 months, I defy anyone to come up with a formula that would achieve what he is accusing us of doing. I reject his analysis.
	The hon. Gentleman referred to what he described as last year's "fiasco". In my view, however, there is a relationship between the decisions that we took last year on excessive budgets and council tax levels, and our success this year—and in future, no doubt—in keeping council tax levels down. I suspect that the hon. Gentleman is not quite sure whether he would prefer there to be higher council tax increases so that he could blame central Government, or lower council tax increases, for which he would no doubt give the credit to Conservative-run councils—but not Labour ones—in the forthcoming local government election campaign. He cannot have his cake and eat it, although he always tries to do so.
	The hon. Gentleman's final point related to the comparison with the Greater London authority. I repeat for the benefit of the House that the principles involved this year and last year relate not just to council tax levels but to budget requirement levels—in layperson's terms, expenditure levels—of the authorities concerned. It is important that that point is understood.

Andrew Stunell: I thank the Minister for his statement and the measured way in which he presented it, although I cannot thank him for the news that it contained.
	I am sure that the Minister recognises that yet again council tax nationally is rising by twice the rate of inflation. He will know that the Liberal Democrats believe that the tax should be scrapped, not simply fudged and tinkered with. What does he have to say to pensioners across the country who, if they were paying the average council tax last year with the £200 rebate and are now paying the new average council tax without the £200 rebate, face a 25 per cent. increase in their payment of council tax in the coming year? It is fine to cap local authorities, but does he not understand that without that rebate, pensioners, the poorest council tax payers, will be hit hardest by his and the Chancellor of the Exchequer's combined decisions?
	Should not local tax be based on ability to pay? Do not the Deputy Prime Minister and the Minister understand that the current system is fundamentally flawed and puts the poorest at a disadvantage when it comes to paying for local services? Will the Minister now speed up the Lyons review and make sure that that report comes to the House promptly, not delay its implementation until after the next general election, which would condemn the poor council tax payers of this country to another three years of this iniquitous system? He should bring it to the House with his reform ideas clearly in mind.
	When did resistance to capping and all its works, clearly and firmly expressed by the Deputy Prime Minister when in opposition, translate into the current enthusiasm for centralising and suppressing the work of local authorities? Does not the Minister see that capping is a sign of Government failure and not of Government success? Underlying all that is the byzantine grant allocation mechanism that he and his colleagues have devised. It might or might not be politically partisan, but it is certainly partisan as between central Government and local democracy, leading to higher council tax, intolerable burdens on pensioners, cuts in services and, today, the ultimate madness, capping by this Government.

Phil Woolas: Not yet. I congratulate the hon. Gentleman on his new position and look forward to debating this important policy subject with him.
	At least the hon. Gentleman's points, in contrast to those made by the hon. Member for Brentwood and Ongar (Mr. Pickles), are based on a policy. At least he has a policy. It is an unworkable policy, and the wrong policy, but it is a policy. He says that the ability to pay should be the criterion for a local tax. We will wait to see whether such a local income tax proposal emerges from the Liberal Democrats' internal debate. He has made it clear, however, that he believes that local tax should be based on ability to pay. Of course, that ignores all those people in hard-working families, with two or more income earners, who would pay for the difference. I suspect that the "scrap the tax" campaign—indeed, I know it for a fact—does not have details of the costs of the extra local income tax.
	The hon. Gentleman asked about the timing of the Lyons review. For the sake of clarity, the Government intend to publish a White Paper on local government before the summer recess.
	The timing of the announcements by Sir Michael Lyons is a matter for him, but we expect his next interim report to be published in the first half of the year, and the final report to be published by the end of the year. That is the time towards which we are working.
	The hon. Gentleman criticised what he described as a centralising Government. I suspect that he is not fully aware of the impact of the new local area agreements, which are bringing about an important change in the relationship between central and local government, and the working relationship that we have on a practical day-to-day level with the Local Government Association as we consider how best to implement the reduction in the performance regime and the extra financial freedoms and flexibilities that have been introduced. I am sure that the hon. Gentleman welcomes those, along with his Liberal Democrat colleagues on the LGA.
	The hon. Gentleman asked about pensioners. As I said earlier, some 14 per cent. of the total council tax bill is now paid through council tax benefit, and there is additional help for pensioners as well.
	The hon. Gentleman accused me, or accused the Government, of having a byzantine formula. It is not always entirely fair to cite the words of the hon. Member for Brent, East (Sarah Teather), who preceded the hon. Gentleman in his job, but she criticised me for making the formula simpler when I announced the abolition of the formula spending share.

David Borrow: May I raise with the Minister the impact of the capping criteria on authorities that have historically had a low council tax, or, in the case of the Lancashire police authority, a low precept? Over a number of years, it has wished to raise its precept to its expenditure and to be in the middle rather than at the bottom of the list of authorities in respect of spending, but it has been unable to do so. That will have a considerable impact over the next few years as a result of the merger of the Lancashire police authority and Cumbria police authority, which has a much higher precept. Will the Minister comment on the likely impact of the capping criteria in the light of that merger?

Phil Woolas: I understand my hon. Friend's point. Lancashire police authority has, in common with others, been reasonable in setting balanced budgets. My hon. Friend's question about the impact of the merger of his police force is a matter for my right hon. Friend the Home Secretary, who will shortly take decisions on the future composition of the police. My hon. Friend's point about the historic level of the council tax having a huge impact on the way in which the precepts have been levied has also been raised by several hon. Members. One of the major reasons why I took the decision to abolish the formula spending share was to allow greater transparency so that the House and the Lyons review can make decisions on the basis of facts rather than notional figures.

Phil Woolas: In my statement and in previous answers, I pointed out that one has to look at support for pensioners and others on fixed incomes in the round. The hon. Gentleman ignores the fact that the pension credit, help with winter fuel payments and the council tax benefit system have helped to ensure that on the whole, pensioners are better off. Through the council tax benefit system, this Government ensure that the poorest pensioners are given help and that those on full pension credit pay no council tax at all.

Phil Woolas: Of course, I would be willing to meet my hon. Friend. Last year, we gave, and fulfilled, commitments to meet all councils and Members concerned about their local authorities' budgets and about council tax capping decisions. It may be helpful to my hon. Friend if I emphasise the point that local authorities have the right to appeal against the decision, and I have an obligation to give serious consideration to their representations, as well as any made by Members.

Barbara Keeley: I beg to move,
	That leave be given to bring in a Bill to require that general practitioners or Primary Health Care teams identify certain patients who are carers or who have a carer; to require identified carers to be referred to sources of advocacy, help and support; to require that carers' needs are taken into account in relation to the allocation of appointments, procedures for issuing prescriptions, and waiting room arrangements; to make provision for routinely checking the physical and emotional health of carers; and for connected purposes.
	Although there are 5.2 million carers, I want to focus on those who have the heaviest commitment, where caring can have an impact on the health of the carer. One million carers care for more than 50 hours a week, which is more than a full-time job. Research shows that such caring commitments often result in poor health for the carer. A Carers UK report, based on the 2001 census, showed that one in five of those caring for more than 50 hours a week were not in good health and that figure worsened to one in four carers in some areas of the country. Areas with the worst figures for poor health among carers also tend to have high levels of disability and illness, often linked to the heritage of industrial disease. Those include my local authority areas of Salford and Wigan and many former industrial and mining areas nationwide.
	The report noted that older carers are often likely to be suffering poor health, and caring will have a further impact on the carer's health. An American study of carers of patients with stroke disease or dementia found that caring did have an impact on their health. Stress from caring affected the carer's immune system in ways that accelerated the risk of age-related diseases. The stress of caring does not just affect older carer—the Carers UK report found that carers in younger age groups, from 16 years upwards, were significantly more likely to suffer ill-health than non-carers of the same age.
	The fact that carers' health suffers through caring is well known to the charities who work to support carers. The Princess Royal Trust for Carers has some 60 centres in its network, which work with primary health care teams to help them to identify and support carers. The trust also has more than 30 projects working directly with primary care. The first projects were established in the early 1990s and that work led to the trust publishing a good practice guide for support workers and GP practices in 1999.
	In the same year, the Government's national strategy for carers noted that the NHS was
	"the single most important point of contact"
	for many carers. The Government highlighted in the strategy that GPs and primary health care teams had a key role that they should be taking with carers within their practice population.
	The strategy included a five-point checklist for primary care to use with carers. The checklist covered GPs identifying carers, making checks on their physical and emotional health, telling carers that they can ask for a social services assessment of their own needs, routinely asking patients about sharing information about their health with their carer and being aware of local carers' support groups and telling carers about those groups.
	The national strategy gave that checklist to GPs as good practice for their work with carers. The emphasis on identifying carers within primary care was important because carers play such a vital role in health and social care. They are increasingly being recognised by NHS staff as partners in care. While a proportion of GPs and primary health care teams do work to identify the carers within their practice population, research on the extent of the work being done shows that this is patchy. Some GPs say that they are too busy to undertake the work. My Bill would require that primary care trusts and local health boards ensure that effective procedures exist within primary care to identify carers.
	Current good practice suggests that it is worth GPs identifying certain carers so that they can be referred to other agencies for support and for assessment of their needs. In a GP practice population of 2,000, there are likely to be some 200 carers, of whom about 40 will be caring for 50 hours or more per week. The task of identifying the 40 carers with the heaviest commitments does seem manageable.
	The Princess Royal Trust for Carers centre in Salford has a primary care liaison worker called Julia Ellis. Julia told me how two primary care practices in my constituency were successfully identifying and referring carers to her centre. Practice nurses from the Limes medical practice in Walkden carry out that work when making home visits to a patient who seems to have a carer. The nurses run through a series of questions with the patient and carer about who does certain tasks for the patient. The nurses then fill in a referral card for the practice to ensure that the primary health care team know about the carer, and they also ensure that the carer is referred to sources of advice and support.
	The Dearden avenue medical practice in my constituency has a different approach. Its staff carried out a search on the practice's computer system. For all those patients over 70 who were not in residential care homes, a letter was sent to the next of kin asking if they were the patient's carer. Out of 149 letters sent, 90 were returned from carers. That excellent response rate enabled follow-up information to be sent, telling the carer about support and information available, including having an assessment of their own needs at Salford carers centre.
	I pay tribute to the Princess Royal Trust for Carers for its work in primary care for many years in centres like the one at Salford, and to Carers UK for their campaigns to highlight carers' issues and needs. Although I was pleased to find that GPs and primary health care teams in my constituency are tackling the work of identifying and referring carers, there is much more to be done.
	Since I became an MP, a number of constituents who are carers have asked for help with urgent problems with health services. I have found that those constituents tend not to think of themselves as carers; nor have they been identified as such by their GPs. They do not know that there is a carers centre in Salford and a carers support group in Wigan and Leigh, both of which can offer them advice and help. It seems that we have a long way to go before it is routine for carers to be identified and offered the help and support that they need.
	Carers are not yet routinely identified and referred for advice and support; nor are they helped to plan alternative care if their own health fails. Last year, Carers UK reported on the experiences of more than 1,000 carers who had to find alternative ways to manage their caring responsibilities during an emergency or health crisis. Some of those carers had life-threatening conditions themselves, but they still had a battle to find information and support.
	Carers with substantial caring commitments need to have regular checks on their own physical and emotional health. My Bill would require that carers are offered consultations and health checks and that that is done routinely for carers whose health is at risk because of caring. Carers also need to have regular reviews of how they are coping with their caring commitment in case their own health deteriorates or they stop being able to cope. They also need information on what alternative care is available, and my Bill would enable carers to be referred for such advice.
	Research has shown that carers can find it difficult to make an appointment with a GP for their own health needs, as they are more restricted in the times that they can attend and must often make alternative care arrangements. Similarly, it is difficult for them to get out of the house to pick up prescriptions. When attending an appointment with the person who is cared for, the waiting room arrangements can be a barrier for carers, particularly if the cared-for person is an autistic child, chronically or terminally ill, or suffering from dementia. Having to wait to see a GP is annoying for many people, but carers in the situations that I have described find that a wait may be impossible. My Bill would require that primary care services take carers' needs into account in making medical appointments, issuing prescriptions and making suitable arrangements in the waiting room.
	The recent White Paper, "Our health, our care, our say", offered a new deal for carers and an updated and extended national strategy. The new strategy will promote
	"the health and well-being of carers, including the particular needs of younger carers."
	I hope that Ministers will study my Bill, as a key step in offering that new deal to carers. I thank Carers UK and Luke Clements for helping me to draft the Bill and the House for giving me the opportunity to present it today.
	Question put and agreed to.
	Bill ordered to be brought in by Barbara Keeley, Dr. Hywel Francis, Meg Hillier, Alison Seabeck, Ed Balls, Tony Baldry, Mrs. Nadine Dorries, Mr. Paul Burstow, Lady Hermon, Helen Goodman, Lynda Waltho and Ms Diana R. Johnson.

Ruth Kelly: Today, we debate the central theme of this Labour Government's 10th Budget: education—our No. 1 priority. Our vision is for a nation that is both economically successful and socially just, where everyone has the opportunity to fulfil their potential, no matter who they are or where they come from. Education is central to that vision. It has the potential to transform our lives, individually and collectively. It is a powerful force for both economic success and social mobility, which is why Labour values it so highly and debates it so passionately.
	In last week's Budget, we had to make a choice—we could invest in our children, schools and young people or we could put tax cuts before the needs of our young people. We chose to invest in the future and in our economy, leaving the Opposition to make the case for the old Tory politics of cutting public services to pay for tax cuts. The prosperity of our nation requires a Government who are not only strong enough to take the difficult decisions for today, but who have the vision and determination to take the essential decisions needed for tomorrow. Since we took office in 1997, this Government have never failed to meet that challenge, making the case for reform in our education system where it was needed, but also backing that reform up with investment.
	The priority of this Labour Government is to pursue our vision, in which an outstanding education will be the right not only of a few pupils who have opted out of the state system or whose parents benefited from a good start in life, but of every single child—100 per cent. of our children will be valued highly; 100 per cent. will be fully equipped for the challenges of the future. Because we want every child to have the chance to succeed, schools were at the heart of last week's Budget. The Government have already raised standards in primary and secondary education. There has been unprecedented capital investment since 1997. There are 30,000 more teachers and more than 130,000 more support staff in our schools, and there have been year-on-year improvements in results at ages 11 and 14 and at GSCE. Where only 45 per cent. of pupils got five good GCSEs in 1997, 56 per cent. achieved that level in 2005.
	The Education and Inspections Bill currently before the House takes that transformation of schools further still. Schools will be able to take the decisions that they need to raise standards and will be free to form relationships with external partners, such as business foundations, further education colleges and universities, charities, and other schools, where that will help them to drive up standards. For the first time ever in our nation's history, we are introducing a new right for all young people to a high quality vocational route from the age of 14.
	The Budget heralds more major investment for our schools. We have already doubled the money that we spend on each pupil each year from £2,500 in 1997 to £5,000 today, but we know that, in the independent sector, average spending on each pupil is still £8,000 each year. As the Chancellor has made clear, our long-term aim will be to close the gap between spending on private school pupils and those in state schools. We want all pupils to benefit from the investment and support now only available to some of them. In particular, as a first step the Budget includes capital investment in school buildings and information and communications technology, which will increase by £1.6 billion to a total of more than £8 billion by 2010–11. That will close the historical gap in capital investment between state schools and independent schools so that all our young people can benefit from world-class educational facilities.

Michael Connarty: My right hon. Friend is moving on to an interesting topic, but I want to return to the previous topic of capital investment. Has she done an analysis of the distortion caused by forcing local authorities to have academies? On at least two occasions, I have heard my colleagues say that their local authority has been told that if it will not have an academy, its capital investment programme will be put back by two or three years.

Ruth Kelly: Clearly, schools must make decisions on health and safety grounds that are right for their staff and pupils. I urge any staff involved to think seriously about the consequences for schools, especially those that serve special needs children.
	Our schools are at the heart of our vision for a world-class education system, but they are only one part of it. Labour Members are clear that further education is also crucial. It is the real engine of social mobility in this country. It gives a second chance to those who missed out at school and helps people to build new careers. It enables those stuck in unfulfilling jobs to retrain so that they can get on.
	Today, I have published a White Paper on the future of further education. It sets out an ambitious programme of investment and reform and gives the college sector the status and attention that it deserves. The Government have chosen to invest in the college sector, just as we have in our schools. Since 1997, there has been a 48 per cent. real-terms increase in investment. An additional £350 million of capital over two years for colleges was announced in last year's Budget, and new resources are set out in this year's Budget and today's White Paper.
	Labour Members have an ambitious programme of investment for our colleges—we have made our choice. The investment that we have already delivered has paid off. More people are joining FE courses—6 million now compared with 4 million in 1997—and more young people and adults are starting and completing good qualifications every year. However, we face unprecedented challenges, so we must do much more. Our post-16 staying-on rate is one of the worst in the industrialised world, and we need to transform the skills of adults if we are to remain competitive in the new globalised economy, with new players such as India and China becoming more powerful every day. Standing still is simply not an option.
	I want to see all young people in education or training. I want all adults to be able to continue to learn new and valuable skills and all employers to fulfil their responsibilities to train their work forces. Today's White Paper will make a reality of those ambitions. There will be £25 million to fund a new entitlement to a free first level 3 qualification for all 19 to 25-year-olds, together with an extra £11 million to provide maintenance support to help with living costs. There will be £11 million to help colleges to improve their work force by recruiting mid-career professionals from industry and top-flight graduates. There will be £20 million to address the issues identified by the Women and Work Commission in facing up to the scandal of unequal pay.

Ruth Kelly: My hon. Friend makes an important point. It is right that funds are in the hands of individuals so that they can access the courses that they think best meet their needs. The vision of a demand-led system—by both individuals and employers—is at the heart of our approach for the further education sector. Clearly, the individual learning account experience was subject to fraud, and we learned lessons from the Select Committee inquiry into that. In future, all courses will have to be quality assured. A register of quality-assured providers will ensure that it is not possible to defraud the system. At first, the new accounts will be available only for level 3 courses, rather than all courses, and we will pilot the approach carefully before extending it across the country. If, as I think that we will, we develop a watertight system that puts power in the hands of the individual, we will move towards a further education system that is in general much more responsive to individual need and demand and that helps us to meet the skills challenges of the future.
	We will not only put more power into the hands of the individual in the further education sector, but we will ask colleges to be more responsive to employers. I would like to see courses that are chosen by employers and delivered in the workplace so that companies can access all their training needs, from adult literacy to degree-level engineering, in a convenient and timely way. All colleges will be asked to specialise in their strong areas so that they all have a real centre of excellence. We will raise the bar on standards by taking tough measures to improve colleges that are underperforming. This is a radical package for the further education sector, and it is a Labour package. This is a Budget that secures fairness for every child and every learner by investing in every child and every learner. The Conservatives had the chance to invest in the further education sector when they were in govt, but did they? No. In fact, funding was cut by 14 per cent. in real terms under the previous Government.

Ruth Kelly: Again, the hon. Gentleman makes the important point that employers in each sector should be intimately involved, not only in delivering part of the diploma, but in designing the curriculum content. That is why I have asked every sector skills council, which the Government have set up in every major area of the economy, to lead in bringing together a partnership of those interested employers to agree the content of each and every one of those specialised diplomas. By 2013, every young person in the country over the age of 14 will have the choice of learning on one of those 14 specialised diplomas, to which he so rightly referred. Bold thinking, but the need for much higher quality and better vocational education is clear. If we are to compete against China and India, we need to invest in engineering and other major parts of the economy.
	In proposing our reforms, we have always been clear that they need to be backed up with investment. We have done that against a backdrop of an Opposition whose policy on investment is in complete disarray. The Conservative party refuses to match the investment that we are putting into our education system. I ask the hon. Member for Havant (Mr. Willetts) to contradict me if what I am saying is not true. It is a party that yet again puts tax cuts before the investment that is needed in our nation's future.

David Willetts: As we are debating the Budget, I draw the House's attention to my entry in the Register of Members' Interests.
	I want to focus on education, and I ask the Secretary of State when the decision was taken to put it at the centre of the Budget. Of course we welcome the fact that it is centre stage, but one suspects that the Government thought that they would like to do health, but that was bit too embarrassing, so they then thought they would like to do pensions, but that that was too difficult. It seems that by a process of elimination they eventually decided that education had better be the theme.
	We welcome the announcements on extra expenditure on education in so far as we understand them. I had hoped that we might know a bit more about the detail after the Secretary of State's speech, but sadly, we do not. Although we welcome the extra spending, it has to be accompanied by reform. To secure the advantage of the extra expenditure, there has to be real reform of public services.
	It was striking that in the Budget speech last week, the Chancellor spoke a lot about education and education spending, but he never once mentioned the Education and Inspections Bill, which was supposed to represent the pivotal moment when the Government committed themselves to serious reform of education. He offered spending without any commitment to the reforms on which the House had voted only a few days earlier. One might have expected him to show at least a little bit of gratitude to Opposition Members for having helped him to secure those reforms.

David Willetts: I thought that in all parts of the House there was some support for setting as part of what is called personalisation. I am asking whether the extra money that will go to schools is supposed to be spent on personalisation, and if the Government claim that it is for personalisation, how they will set conditions on how it is spent.
	I turn now to the medium-term proposal on capital expenditure. We are a bit baffled as to exactly what is going on here. Perhaps the Secretary of State could help us. She was Economic Secretary to the Treasury, and before that an economics journalist, so if anybody can enlighten us, it is her. As I understand it, we have been told that we are to have a total of £34 billion of capital expenditure over five years, which we welcome. We have been told that the money will rise from £5.6 billion this year to £8 billion in five years, but for some reason we are not to be provided with the crucial information on how the money will be broken down over that period, which schools and people planning capital expenditure need if they are going to get proper value from it.
	There are a limited number of ways in which one can spend sums that start at £5.6 billion, end up as £8 billion and add up to £34 billion, so why does the Secretary of State keep the House in suspense? Why does she not fill in the gaps, so that schools and people who wish to help finance capital spending in schools can do some serious planning? That would be very helpful for many people who care about the quality of education. Again, if she wishes to intervene, I would welcome further information.
	The last of the Secretary of State's three announcements on spending is the figure for the long term—the proposals for increasing expenditure to reach the level in the private sector. When I heard the Chancellor announce that in his speech the other day, I thought that I had heard it before. Indeed, what do we find but that in 2001 the Prime Minister, speaking at the conference of the Association of Teachers and Lecturers, said that his aim was
	"to get to the situation where we have a state education system that is as good in its facilities and its investment as the independent sector"?
	When asked what that meant, a senior Government source—for all we know it was the hon. Member for Wolverhampton, South-East (Mr. McFadden), who I think was then one of these advisers, and an expert in the black arts—said:
	"The prime minister was indicating that as we continue with real-term, year-on-year spending in state schools, we would hope to narrow the gap with the independent sector."
	In 2001 the gap in spending between the state sector and the private sector was approximately £2,000 per pupil a year. In the five years since the Prime Minister made that pledge, the gap has widened to £3,000. Now that the Chancellor has turned up and repeated what the Prime Minister said five years ago, we are rather interested to know why the Government should do any better this time than they did when they made the announcement last time.
	Of course we want the gap to be bridged and we want to see that level of expenditure, but it is hard for us to judge how the Government are setting about achieving it. One possibility—although I would never suspect the Secretary of State of such cynicism—is that we simply take today's expenditure on education as a percentage of GDP and project it forward, and there comes a point at which simply by holding expenditure constant as a percentage of GDP, it eventually reaches £8,000 per pupil per year. In fact, on our calculation that happens shortly after 2020, so perhaps the Government expect it to happen shortly after 2020. Indeed, in his briefings on the Budget, the hon. Member for Normanton (Ed Balls) gave 2020 as one of the dates when the target would be achieved.
	That aspiration is in reality a forecast, and the Government need do nothing other than keep public spending on education at today's level. The Secretary of State may tell us otherwise, and if so, I would very much welcome that. How does she intend to achieve that aspiration, and over what time scale? We are happy to sign up to such an aspiration, but while the Government talk only about inputs, spending and ratios, we want standards in state schools to reach the standards in private schools. That is what parents care about most, and that is how we should approach the objective that has been set.
	When the Secretary of State and the Chancellor reflect on these matters they ought to take careful account of the wise advice in successive reports by the Education and Skills Committee. In two separate reports on public expenditure it has issued salutary warnings that the Chancellor and the Secretary of State have not taken fully into account. Its report on public expenditure on education and skills for the Session 2004–05 begins with a crucial paragraph entitled "The effectiveness of increased expenditure", which states:
	"The Chancellor's budget book for 2004 claimed a direct relationship between the increased investment in education since 1997 and improvement in GCSE results in particular. Our evidence showed that with lower levels of investment"—
	That is something of which the Opposition are accused—
	"GCSE results had improved to at least the same extent in earlier periods in the 1990s."
	We therefore secured similar improvements.
	The report continues:
	"The Government needs to take great care in making claims about the effectiveness of increased investment in education in increasing levels of achievement which the evidence cannot be proved to support. Links between expenditure and outcome remain difficult to establish."
	That is extremely wise advice. When the Prime Minister said that he was going to focus on outputs, not inputs, we thought that that was part of what new Labour was supposed to be about. However, what we heard from the Chancellor last week and the Secretary of State this afternoon was entirely about inputs, not outputs. Why did the right hon. Lady not take to heart the advice in the Select Committee report?
	The Select Committee returned to the subject a year later and, importantly, warned the world of education that the rate of growth of education spending would slow down. Its 2006 report on public expenditure on education and skills opens by making the point that the Government
	"sets great store by stability of funding; it needs to ensure that budget holders across the education sector are aware that funding will not rise at a significant rate over the next spending review period and beyond."
	It is great to see the hon. Member for Huddersfield (Mr. Sheerman), the Committee Chairman, in the Chamber. Paragraph 15 of the report goes on to say:
	"The Government has already accepted that spending increases will be more modest in the years ahead. The DfES needs to be explicit in stating that growth in expenditure on education and skills will slow down significantly in the coming period. For schools that may mean growth of 2–3% a year in cash terms compared to 5–7% growth in recent years."
	The Select Committee rightly called for a grown-up debate so that people who work in education can accept that the rate of growth of education spending will slow down a great deal.
	That was extremely important advice, but last week the Chancellor and the Secretary of State, who has talked about a "huge new resource", painted a picture for people in the world of education that is very different from the reality set out soberly and frankly in the Select Committee report. I would be happy to join the Secretary of State in a grown-up debate about how, if the rate of growth of spending is to slow down, that money can be used most efficiently to raise standards in education.
	Instead of following the Select Committee report, the Government have bandied figures about as if there is there is going to be an extraordinary splurge in public spending. The figures show that the rate of growth of public spending will not be as great in the next few years as it has been in the past few years. It would have been grown-up to follow the Select Committee advice and confront the world of education with that reality, rather than try to avoid it. The Chancellor frequently enjoys accusing us of boom and bust in our management of the economy, but the record shows that in the financing of public services the Government are responsible for a cycle of boom and bust.
	May I invite the Secretary of State to focus on science—a subject to which the Chancellor referred in the Budget? The state of science is a subject of widespread concern, and something that worries Members on both sides of the House. Specific science initiatives were launched which, in so far as we can understand them and the figures behind them, we welcome. However, I hope that the Secretary of State will forgive our scepticism about the special schemes that are always being announced.
	During the election campaign, less than a year ago, the Prime Minister said on 14 April 2005:
	"Today we pledge an important new element in this knowledge investment—a £250 million three year programme for England to renovate or build at least one new science lab in every secondary school in the country, to give a further boost to school science and to give all schools new facilities even if they are not scheduled for early complete refurbishment for the longer-term capital programmes."
	During the election campaign, £250 million over three years was promised for science labs. Ever since, people have tried to obtain information about that £250 million programme and what is supposed to be happening. Finally, Lord Sainsbury sent a letter to John Dunford last month that made it clear that there was no special £250 million fund whatsoever. Instead, Lord Sainsbury said that
	"the Office of Science and Technology and the DfES will be undertaking a pilot project to build a demonstrator school science lab."
	If that is what happened to the £250 million scheme last year, why should we have any faith in the announcements that the Government have made this year?

David Willetts: My hon. Friend is right. I was hoping to ask the Secretary of State for a little more information about what she was doing to tackle that. I intended to devote a section of my speech to the 3,000 new science teachers mentioned in the Chancellor's Budget statement, but not mentioned in the Red Book. Perhaps we will hear more about them in the winding-up speech.
	I turn to the subject of further education, about which the Secretary of State spoke and on which we have had a White Paper today. I agree with the right hon. Lady about the importance of FE. I served on the governing body of an FE college for six years, after it was incorporated. Many FE colleges greatly welcomed incorporation, although I fear that the present direction of policy is slowly and insidiously to take away many of the freedoms that FE colleges had an opportunity to seize then.
	FE has rightly been described as sometimes being the middle child in the world of education, which does not get the attention that it merits, between schools and higher education. Sir Andrew Foster's report on FE was excellent. I hope the Secretary of State will agree that if we ever want to assess the Government's performance when it comes to opening up skills and opportunities for our young people, nothing beats table D4 of Labour Market Trends. That says it all. I shall give some edited highlights.
	The table is entitled "Economic Activity and Economic Inactivity", broken down by age. It shows that among 16 and 17-year-olds, 95,000 are unemployed and not in full-time education. There are a further 122,000 who are economically inactive and not in full-time education, which adds up to a total of 217,000 16 and 17-year-olds alone. That compares with a figure of 170,000—quite bad enough—when the Government came to office. I should like to hear from the Secretary of State why she thinks that figure had deteriorated so much during her years in office.
	The next line in the table provides figures for 18 to 24-year-olds. A total of 997,000 18 to 24-year-olds are neither working nor studying nor training. Again, that is a bad figure; the total was 912,000 when the Government came to office. After nine years of initiatives, the new deal and all the other investment, the number of young people who are neither working nor studying nor training has significantly deteriorated since the Government started. Instead of the complacency that we heard from the Secretary of State, I hoped that for once she would tell us why the figures are still deteriorating. None of us can take any comfort from the fact that the position is so bad. The Opposition are entitled to be sceptical about the Government's chances of tackling this very serious problem.
	On page 27 of Sir Andrew Foster's report there is a little box that tells the story that we hear from anybody working in the world of FE. The box is entitled, "List of organisations with a monitoring/inspection/improvement role in FE colleges". I will not detain the House by reading out the full list. Suffice it to say that 17 different bodies are listed in the report as having a role in the regulation of FE. My understanding of what today's White Paper proposes is that one of the bodies, the adult learning inspectorate, is merged with Ofsted, but one new body is created—the quality improvement inspectorate—leaving us still with a net total of 17 bodies improving, regulating and auditing FE. That is far too many bodies supervising FE. It is clear from Sir Andrew Foster's report that that is the problem that he wants tackled.
	In some ways, the best bit of the report is Appendix 2, where the real message comes across. It is entitled "A view from abroad", which presents evidence from other countries. In the United States,
	"There is no formal inspection process, national funding regime or national qualifications system".
	There is
	"a strong emphasis on self-regulation and a lack of top down control".
	In Denmark it is the same story. In Australia
	"There is a much simpler accreditation and accountability system".
	In the Netherlands,
	"Although inspection is more frequent than in England",
	there is
	"greater autonomy at institute level".
	The report is clear. There should be more autonomy for FE colleges, and fewer bodies endlessly inspecting, auditing and checking them—but there is nothing in the White Paper that tackles that problem. Instead, we still have a multiplicity of agencies.
	The Secretary of State spoke today about some of the measures in the White Paper. One of the features of it is the focus on the under-25s. We would like to hear more about how that balances out—what it will mean, for example, for programmes and courses that are particularly valued by older people, and whether the shift in funding will mean more of the kind of problems that were brought to all our surgeries in the past couple of years involving older people who enjoyed courses at FE colleges that did not lead to an official vocational qualification, but had found that their costs rose or their courses closed because the Learning and Skills Council was no longer willing to fund them.
	Many people get real social value from a range of courses—be it learning the piano or the guitar, or basket weaving. We would like to hear from the Secretary of State whether buried in the White Paper is a further shift of funding away from such courses, so that when people come to our surgeries again next year to ask why, yet again, the cost of those courses has gone up, we can be clear about when the Government made the statement, and what its implications were.
	There is a big focus in the White Paper on national vocational qualifications. Is the Secretary of State, like me, concerned about many employers' lack of confidence in NVQs? The paradox is that the funding is being shifted to NVQ levels 1 and 2, when those qualifications command no premium whatsoever in the labour market. They are not worth any increase in pay. That tells us something about what employers think of those NVQs. Why are the Government trying to funnel Learning and Skills Council funding into courses that, sadly, are of the lowest value in the labour market, and away from courses that have other values?
	I hope that in the course of the Budget debate we will get more information about these important points, which will enable us to get behind the rhetoric of the Budget statement last week and the Secretary of State's speech today, so that people working in education can have a little more hard information on which they can plan. The right hon. Lady failed to provide that information in her speech. I hope that we will hear more in the winding-up speech.
	Let us be clear that as regards the world of education, we have a Chancellor who can only talk money, does not understand the importance of reform, and failed to commit himself to the Education and Inspections Bill in his Budget statement. We have a Prime Minister who talks reform but can deliver it only with Opposition help and support. It is only the Opposition who have a commitment to the proper funding of education, combined with real reform of education. That is why only we can deliver higher educational standards.

Peter Luff: On a point of order, I am sure that you want to be helpful, as you always are, Mr. Deputy Speaker, to the hon. Member who has the Floor. If the right hon. Gentleman were to give way, injury time would be added to his speech, so he can give way without incurring a time penalty.

Gavin Strang: Injury time does not extend the length of the match. The debate will still finish at 10 pm, so an intervention means that fewer hon. Members can take part.
	The UK is at the top of the OECD for stability of growth and of inflation, and interest rates and unemployment remain at historical lows. Average wealth per head has risen from the lowest in the G7 to second place—the G7 consists of the UK, the US, France, Canada, Italy, Japan and Germany. Furthermore, households across the income scale continue to see their living standards rise. A strong and strengthening economy, alongside the sound management of our public finances, means that this Government have again been able to invest in Britain's future.
	The Budget has served another purpose by shedding a little light on the policies of the official Opposition. After all, although Conservative Members are eager to tell us that they have changed, they are rather shy about what they have changed into. We now know that the Conservative party would reduce spending by £17 billion in the year ahead. On top of that, my right hon. Friend the Chancellor has calculated that a Conservative Government would require public spending to be £16 billion lower in 2007–08, which would eliminate all possibility of additional investment in infrastructure, science or education.
	A key benefit of the economic strength and stability maintained by this Government has been the steady rise in the number of people in work. The UK has the highest employment rate in the G7, and the number of people in employment is close to record levels—up by 178,000 since last year. More people are in work, and with the national minimum wage, child benefit, the child tax credit and the working tax credit, this Government have made work pay. People are no longer better off on the dole. Alongside the high level of employment, the number of unemployed and the rate of unemployment have stayed and remain low.
	There has been a slight rise in unemployment in recent months. There has also been a large migration of workers from central and eastern Europe into this country, and, generally speaking, those people are now productive members of our labour force. There has been speculation that the scale of that influx might have been a factor in the recent slight increase in unemployment. It is early days, but the Department for Work and Pensions has published two working papers since the enlargement of the European Union in May 2004. I am pleased that the indications to date are that this migration is not the cause of the small recent rise in unemployment and that the overall economic impact of the migration has been "modest but broadly positive".
	The current budget balance is clearly important. We can argue about the scale of borrowing that it is prudent for the Government to undertake in any financial year, and we can debate what is a sensible maximum for the national debt as a percentage of gross domestic product. My right hon. Friend the Chancellor has articulated what is described as the golden rule with respect to our budget balance. I shall leave it to the economists in this House to argue about the length of the economic cycle, but it is worth making the point that, even with the previous dating of the economic cycle, the average current budget balance was zero and the cumulative deficit over the period was £1.9 billion.
	Hon. Members will be aware that the current budget balance depends upon two variables that stretch into hundreds of billions of pounds. Indeed, both current public expenditure and current receipts are in the region of £500 billion. To complain about the re-dating of the economic cycle on the basis of £1.9 billion is to fail to understand the errors inherent in any economic projection—it is difficult to say exactly where we are to the closest £1 billion—which is especially true when the projection is the difference between income and expenditure.
	One of the key themes of this year's Budget has been Britain's competitiveness in the global economy, and, of course, our economy would not have grown and would not continue to grow if there were a lack of confidence in its management. I have said a few words about the current budget balance, but, of course, we must not lose sight of the balance of payments—I am referring to our trade balance, which one might call the external balance. I encourage my hon. Friend the Financial Secretary to address the importance of the trade balance in the modern world, because, as hon. Members know, there has been a continued and substantial deterioration in our balance of payments. In the past five years, the deficit has increased from more than £19 billion in 2000 to more than £47 billion in 2005, and the trend was rising before that. At some point, the Government and hon. Members must address that point.
	In one sense, I am sure that hon. Members agree that it would be a good thing if we were to increase our imports from the developing world. The commitment of my right hon. Friend the Chancellor to the developing world is well known, and I believe that hon. Members on both sides of the House have acknowledged it. Thanks to the Labour Government, we are recognised as one of the leading countries in the developed world in addressing the challenge of global poverty. I hope that I speak for hon. Members of all parties in saying that the UK should seek to avoid economic activities that run contrary to the legitimate interests of people in the developing world. The policies that govern our trade must be as constructive towards the developing world as possible.
	In the limited time remaining, I want to discuss climate change, which we must consider when we talk about economic growth in the UK, Europe and the whole world. We certainly want our economy to grow in a way that minimises carbon emissions and our demand on finite resources, but we have not reached the point at which we need to implement drastic policies to contract the economy for environmental reasons. However, we must use energy much more efficiently, because we are exceptionally wasteful. We have not addressed basic issues such as fitting insulation to council houses. Time is limited, so I cannot discuss the use of finite resources such as fossil fuels.
	We need to address those important issues in the coming weeks. Thanks to this Government, living standards continue to rise. Our aim should be to secure continued stability and sustainable economic growth.

Sarah Teather: I think that the Chancellor actually said that he would match the level of funding to that of today rather than talking about the gap. As the Secretary of State said earlier, there is no timetable for narrowing that gap. It depends on the rate at which private sector spending increases.
	Despite the spin and nonsense, the Budget contains genuine bonuses and good proposals for education with which I wholeheartedly agree. I shall highlight a few of those, because it easy for us to spend a great deal of time castigating the Government about things that we disagree with.
	First, let me highlight a proposal that nobody else has mentioned and that is unlikely to gain any headlines, spun or not, but which is none the less welcome—that is, that we should move towards a simpler and less burdensome assessment of research in our universities. We will need to look at the detail of that. However, it seems eminently sensible to move towards a metric system in place of the existing research assessment exercise and to run the old system in conjunction with the new. That is likely to be welcomed by all, especially universities. We look forward to the Government clarifying those proposals.
	Secondly, the Budget includes a genuine acknowledgment of the depth and scale of the problem of the shortage of specialist science teachers. Although that is rather late, as it comes 18 months after Professor Smith's report, it is welcome, as are some of the proposals. Liberal Democrat Members have for some time pointed out that it will not be possible to fill all the gaps in the system merely by recruiting new specialists, and that we must also invest in retraining teachers currently teaching in areas outside their own specialism. We made an election pledge to do that in our 2005 manifesto. The Budget announces pilots to begin that process. We look forward to the results of those pilots. I urge the Secretary of State to extend the scheme to language and English teachers, where there is also a critical shortage. I am pleased that the Government have acknowledged the shortage of specialist science teachers, particularly in physics and chemistry. The Institute of Physics and others have called on the Government to break their target down for recruitment to identify those areas of specialism in particular, and it is welcome that they have done so.
	The detail of the commitment to recruit, retain and retrain new specialist teachers remains unclear, as the hon. Member for Havant observed. Will there really be 3,000 new teachers, as reported by the press, given that the detail is not in the Budget papers? If so, what steps are the Government taking to entice people into teaching and to prevent them from leaving? Last year, they missed their own target for recruiting specialist science and maths teachers—and, indeed, specialist language teachers, where they fell short by a greater amount. What new activity are they proposing to ensure that they reach this target? Surely they need to look at this as part of a general problem with recruiting and retaining highly qualified teachers. We have a critical shortage of head teachers and, despite six-figure salaries being offered, many posts lie empty for extended periods. The Government need to get to the bottom of why so many people do not want to do the job. I suspect that when they ask teachers and teaching unions why schools find it so difficult to recruit highly qualified teachers, they will find that, despite the spin in the White Paper about freeing up schools, it is teachers who are desperate to be freed from the endless edicts from Whitehall and want far more freedom to teach a curriculum that meets the needs of their students.
	Let me turn to the money allocated to personalised learning. That is welcome, but the details of how it will be allocated are not clear, and I would be grateful for the Minister's clarification. John Dunford from the Association of School and College Leaders has described the current system for targeting extra funds on disadvantaged students as spraying funds around like Dick Cheney on a quail shoot. He points out that money is failing to reach the most disadvantaged students, with some schools doing comparatively well despite the fact that they are in low-performing areas. It is not clear from the Budget documents or from previous announcements whether the Government intend to target money based on data surrounding schools or on deprivation figures for the local authority. We urge the Secretary of State to go further and consider targeting on the basis of individual pupils. We are examining the detail of how such a scheme could work in practice. Potentially, it could absorb many of the existing funding streams for disadvantage and focus on underachievement as well as on disadvantaged students, no matter what school they study at, to give a greater incentive to take those students and to provide the support that they need.
	I am sure that the Secretary of State will agree that what would make the most difference in this respect is smaller class sizes, with very young children being the most important age group. That is why we would like class sizes for infants to be reduced to 20. We accept that it is an expensive commitment, so we would want to use the money allocated to the child trust fund to pay for it. We believe that it would be more effective to invest money in a child's education at five than to give them something that they can cash in when they are 18.
	I have mentioned some of the proposals that I welcome and others where I disagree with the Government's focus. Let me conclude by saying a few words about some glaring omissions as regards the proposals on further education. I had hoped that they would be clarified by today's White Paper, but that is not so. The greatest disappointment in the Budget, and indeed in the White Paper, is that while it repeats the earlier aspiration of closing the funding gap between schools and colleges for the same provision, there is no timetable and no concrete commitment to achieving it—it is another uncosted aspiration. The young people who study in FE colleges are disproportionately from less affluent backgrounds, and each is short-changed by about £400 a year.
	The White Paper contains some welcome warm words about a new set of principles for funding 14-to-19 learning such as laying out comparable funding for courses irrespective of institution, recognising genuine costs and advocating an approach that should not limit students' choices. However, the task has been hived off to a technical funding group and I am worried about how much will get implemented and over what time scale. Students and colleges need these changes now. Programmes such as the increased flexibility programme are not funded to the level of true costs, with many colleges, including the College of North West London in my constituency, reporting that they subsidise the programme heavily, with a dramatic impact on courses in other areas. The Government cannot push on with an agenda of contestability and rely on the good nature and social justice ethos of colleges without adequately funding them.
	If we are looking for a place from which to squeeze money, perhaps the Learning and Skills Council should be a prime target for cuts. I welcome statements in the Budget about slimming down that obese organisation, but its costs are astronomical. They run at more than 10 times the costs of the equivalent body in higher education. The LSC is a bureaucratic monster, unaccountable to local people, barely accountable to Parliament and unpopular with colleges. The Government should take a firm hand with it. One of my favourite idiot edicts from that organisation said that science and maths courses should be a low priority in London and proposed that colleges should cut them. Thankfully, it appears to have seen sense, but that is indicative of an organisation that is grossly out of touch.
	The new first level 3 entitlement up to the age of 25, which is included in the Budget, is welcome and has been our party policy for some time. However, the allocated £25 million looks likely to cover only those already paying for the course. Given the statements of the Chancellor and the Secretary of State about the importance of that qualification to the economy, will the LSC be charged with recruiting more students to study at that level? If so, where will the money come from? Are colleges expected to take it from existing adult provision and cut that even further? We already have a crisis in adult provision, not only in basket-weaving or underwater swimming, but in core courses, which are vital to the economy.
	The Budget announces the roll-out of the train to gain programme, but the Government do not seem to have taken account of the IFS report, which said that the scheme had little if any impact in the pilot areas because those who trained under the pilot scheme—the national employer training programme—would have done so anyway. What changes have the Government made to the scheme to take account of the IFS evaluation? They cannot bleat about the importance of evidence-based policy if they choose to ignore evidence that is presented to them.
	The Budget contains some welcome proposals, marred by the usual dodgy statistics and over-inflated claims. However, it also contains some glaring omissions in policy areas that specifically target under-achievement in the most disadvantaged groups. If it had a school report, it would read, "Not bad, but could do a lot better."

Barry Sheerman: In the short time available, I begin by saying that, in 10 minutes, I shall probably appear to be rather negative about the Budget, but I shall try to be balanced. The hon. Member for Havant (Mr. Willetts) has already given a good advertisement for the independence of the Select Committee on Education and Skills by drawing attention to the two recent reports on public expenditure as it relates to education. Every year, our Committee examines spending to ascertain whether it is good value for the taxpayer and whether we can have confidence in the Government's assumptions. It is our job to be independent and objective and to tell the Government how we feel about the comparison between their statements and what they deliver.
	Our report, which was published only two weeks ago, stated:
	"The Government sets great store by stability of funding; it needs to ensure that budget holders across the education sector are aware that funding will not rise at a significant rate over the next spending review period and beyond."
	We pointed out that it appeared as though health spending had not only overtaken education spending as a percentage of gross domestic product but that that trend would continue. That was our view until only two weeks ago.
	Listening to the Budget debate and the remarks of the Chancellor of the Exchequer made me think that we had reached the right conclusions based on the evidence that the Secretary of State and the permanent secretary—who has now moved to the Home Office—presented to the Committee. The Chancellor made a range of commitments last week and it is our job as a Select Committee to track whether the Government follow them through. We will monitor that progress carefully.
	After consulting some of the usual suspects, who immediately analyse the Budget figures, one expert from the London School of Economics suggested that, if one took the Chancellor's commitment to make expenditure of £5,000 a year per state school pupil catch up with the independent sector's £8,000 a year per pupil and timed it for five years, it would cost between £17 billion and £20 billion. If that is the case, it would mean a genuine increase in education spending across the piece, perhaps overtaking health expenditure to account for approximately 7.2 or 7.3 per cent. of GDP.
	I warn the Government that we have a job as a Committee and when the Secretary of State appears regularly before us to discuss the Department's work, we will ask her how far she has got on spending between £17 billion and £20 billion and reaching the education funding target of 7.2 per cent. of GDP. The Chancellor must have known what he was doing last week and we therefore take comfort in the fact that we have a Government who have reasserted their commitment to prioritising education spending.
	Some discussion about the personalisation agenda has already taken place. I intervened on the Secretary of State because I wanted to ensure that we were clear about the figures for that, and that those that she used did not constitute the total amount that would be spent over the two years but built on what had already been promised as spend. I was reassured by her response and I am pleased with the amount. However, I ask her to check regularly to ascertain that the money flows to fulfil the personalised agenda. Our Committee is in the middle of considering special educational needs and some of the most deprived—in every sense of the word—members of our community. Those people need the greatest amount of personalisation and we must get that right.
	Our debates are sometimes taken out of context. We often evaluate a Bill in isolation. I heard some colleagues discussing the new education measure out of context, as if it had nothing to do with the Children Act 2004 or "Every Child Matters", which works towards transforming our education system and the way in which we view children. As we move on with policy, I suspect that we will be conscious that the joined-up government that we now apply to under-18s must apply much further through the age range, especially for special needs.
	We shall call the Secretary of State to appear regularly before the Committee to discuss science in schools. It worries all of us that, in the past 10 years, there has been a 20 per cent. decrease in students who study physics, a 34 per cent. decrease in those who study chemistry and a 32.4 per cent. decrease in those studying engineering. That is a serious decline. I appreciate that the Government have invested money in some of those programmes, as my hon. Friend the Member for Norwich, North (Dr. Gibson) mentioned. However, the situation is grave and applies not only to the UK, but to most countries in the developed world. It is not a problem in China and India, and that is concerning.
	Perhaps the most worrying figure in the Budget was the 3,000 extra science teachers. I have combed through all the relevant documents and I cannot find the money for that. I am sure that the Secretary of State will assure me that the money is there. I want to celebrate 3,000 extra science teachers because I know how urgently we need them. Is the money for them part of the £18 million announced to support teaching and learning in school science? If so, that amount just sounds a bit small.
	As Chair of the Select Committee, I would be neglectful if I did not welcome what I see as the adoption of most of the recommendations of the Foster report in regard to personalisation, to science and to further education. In some areas, the Government have gone beyond the report's recommendations. Much of the further education sector, in wanting to rebuild, wants to have a stake in the 21st century so that the kids in the sector can feel good about their environment. However, many representatives of the FE sector have a problem with borrowing the money and ensuring that they can pay it back over 20 or 25 years. The truth of the matter is that they are a less certain bet for the financial institutions in the City than are the academies.
	I also welcome the change in the research assessment exercise, but I urge the Secretary of State to be careful to get it right, because this is very important to our higher education sector. Yes, there is great discontent with the research assessment exercise—my hon. Friend the Member for Norwich, North conducted a very good inquiry into that issue when he was chair of the Science and Technology Committee—but if we get it wrong it would upset the whole of our research effort in British higher education. We have so much to be proud of in terms of the investment that the Government have put into it over the past few years, so the message is that we are very encouraged and we could return to being the top spender on research. Let us just make sure that the Chancellor's currency is good tender at the local banks.

Bernard Jenkin: I want to focus not so much on education but on the Chancellor and his Budget as a whole. While not quite a personal manifesto for his leadership campaign, his Budget speech gave us a vision of what Britain would be like under his premiership. He told us what he thinks about the key challenges that Britain will face in the coming years, and we now know exactly what to expect from his Government, with an emphasis, above all, on extending the power of central Government that he will control. I came away from the House after his speech with a feeling of alarm about Britain's ability to deal with the key challenges of this new century and about our long-term prospects as a major economic power.
	The Chancellor's strategy for this country appears to have been devised as though Britain were still in the 1970s and still competing with a just handful of high-cost west European powers. We need to be clear about this: Britain is entering a period of unparalleled global change and competition. The Government, and especially the Chancellor, like to refer to global opportunities. That is right: the rapid economic development of places such as China does offer unparalleled opportunities for Britain. But those opportunities will become threats if the Government continue to ignore the way in which the rest of the world is developing.
	The hon. Member for Huddersfield (Mr. Sheerman) has just celebrated the ever-rising level of public expenditure. I should like to explain how that might not be the answer. We have grown used to facing competition from low-cost countries in lower-skill industries, but we shall increasingly find ourselves challenged right across the board as emerging economies begin to produce highly skilled, highly educated, cheap-to-employ graduates. There will be an increasing number of attractive alternative destinations for major business investment, and a country with an uncompetitive economy, and with high taxes and regulation, will lose out. Soon, Britain's problems will shift from retaining low-tech manufacturing to retaining high-tech manufacturing and even financial services and research and development centres. Britain needs to focus above all on ensuring that our economy remains competitive by keeping costs down and on ensuring that our education system is producing intelligent, highly skilled young people who will be able to compete with the brightest and best that other countries are producing.
	Unfortunately, the Budget speech does nothing to address these issues, despite its rhetoric. Reference to 4 million overseas graduates being invited here to be educated does not address the fundamental problems that our economy faces. For a start, the Chancellor has made no commitment to reducing the British tax burden in either the short term or the long term. Instead, he proposes to increase tax again. Indeed, he boasts about the fact. As my right hon. Friend the Member for Witney (Mr. Cameron) pointed out on Budget day, we are therefore still on course for having the highest ever tax burden in Britain, overtaking the tax burden of low-growth Germany. Predictably, the Chancellor has also ignored the direct pleas of the main business organisations to reduce corporation tax. There is a clear trend elsewhere in the world to reduce corporation tax, but that requirement does not appear to trouble him at all.
	It is bizarre to believe that we can compete against the rising economic powers in Asia with our current taxation system when it is obvious that we cannot. It is all very well to take credit for the rise in gross domestic product per head, relative to other countries, but that is in the past. We must look to the future. Britain is beginning to fall down the league tables of international competitiveness from which the Prime Minister used to quote so regularly when he was Leader of the Opposition. According to the Economist Intelligence Unit, Britain has fallen from second to eighth in the global competitiveness rankings since the Chancellor took control of the economy in 1997.
	The Chancellor's strategy will fail. Every year, Britain will continue to become less competitive, and he will delay taking the decisions necessary to meet the challenges of this new century. Of course economic stability comes first, but that is why we have to reduce the tax burden as a proportion of national income, so that Britain can once again become the most attractive place for business investment.
	The Chancellor seems to think that, however much he raises taxes, it has no impact on incentives, on the health of the economy or on competitiveness. That is wrong, and we should not make the same mistake as the Government by assuming that we can reduce taxes only by the amount that we cut spending. That is the myth peddled by the Government; it is not true. In Ireland, for example, taxes have been reduced, yet tax revenues have increased. Let me quote the EU Commissioner for the Internal Market and Services, Charlie McCreevy, who used to be Ireland's Finance Minister:
	"Back in the late 1990s when, as Ireland's Minister of Finance, I started cutting taxes, many people feared that the loss of revenue to the Exchequer would be massive and that the policy would have to be abandoned. But the opposite happened. Far from the policy causing an erosion of the Exchequer's revenue stream, reduced tax rates generated higher economic activity, greater taxpayer compliance and a surge in the tax take for the Exchequer."
	That is the policy that my right hon. and hon. Friends on the Front Bench will be pursuing and why, under a Conservative Government, we will spend more on the public services than a Labour Government will ever be able to afford.
	We can begin to reduce our tax burden very quickly by significantly cutting down on waste rather than on front-line services. Everyone knows that the Government are mired in waste. No doubt the Chancellor will claim that the Gershon review will reduce waste and improve efficiency—it has certainly confirmed that the waste is there. But it is becoming more and more obvious that the review, with its limited ambitions, is a public relations stunt created so that the Government could pretend to be doing something about waste and declining public sector productivity, when in reality they are doing nothing at all.
	The amount of regulation on business needs to be drastically reduced, including the vast amount of regulation that pours out of the European Union, which the Government seem to do virtually nothing to halt. Indeed, the notorious Legislative and Regulatory Reform Bill would give the Government unprecedented powers to overturn or repeal any Act of Parliament that affects domestic legislation, but it would do nothing to address the problem of EU regulation, which the Chancellor himself says accounts for more than 50 per cent. of the regulatory burden on business.
	It is right to put improving education at the heart of any economic strategy, but simply throwing money at the problem, which might earn the Chancellor cheers on Budget day, will not sort it out. We need meaningful reform of the system so that pupils leave school with a proper grasp of maths, science and English, which they need for the modern world. Free A-levels up to the age of 25 is all very well, but a mere drop in the ocean when it comes to the UK's real competitiveness. Over time, it will become increasingly evident that the Government's strategy will not be sufficient to deal with the challenges of the 21st century.
	Are we facing an immediate economic disaster? I doubt that there will be a single devastating event that highlights the Government's mistakes, but we will see, and are seeing, a long, steady period of eroded competitiveness and relative decline. The Chancellor readily quotes our growth performance against slow-growth countries such as France and Germany. But what about Portugal, Ireland, New Zealand, Canada, Australia and the United States? All those countries have mature economies, like ours, which are performing much better than ours. We should be competing effectively against them, but we are not doing so. We will simply not be able to carry a tax and regulatory burden that makes it difficult to do business here, and a dysfunctional education system that cannot produce enough well-educated and capable school leavers.

Stephen Byers: I draw the House's attention to my declaration in the Register of Members' Interests.
	The Chancellor's statement last week demonstrated the extent to which economic stability has now been embedded in our country, in stark contrast to the situation that constituents such as mine witnessed in the 1980s and early 1990s. From that position of economic strength, we can plan ahead with confidence for the challenges that this country faces—and we face several new challenges. I want to deal with the pensions challenge, which will need to be considered in the near future. In my view, it is perhaps the biggest challenge that we face as a country. Two distinct but linked issues must be considered. First, how can we come up with a set of proposals that will offer security and dignity for today's pensioners? Secondly, how can we construct a new regime that is fair, affordable and sustainable for the pensioners of the future?
	The Government already have a good record with regard to pensioners. When we came into office in 1997, we were acutely aware of the way in which pensioners had been let down by the Conservative Government. In 1997, one in four pensioners—2.8 million—were in poverty. It was therefore right that a top priority for an incoming Labour Government had to be how to get money quickly to those pensioners to lift them out of poverty. We used the minimum income guarantee and, more recently, the pension credit to target resources and ensure that those pensioners were taken out of poverty. We were successful. As a result of those policies, nearly 2 million pensioners have been lifted out of poverty.
	Of course, all pensioners benefit from and welcome some of the universal provision that we have exceptionally made available—free television licences for the over-75s and the winter fuel payment, well regarded by pensioners throughout the country—[Interruption.] I will come to the council tax rebate in a minute. The challenge now is to achieve a national consensus on the way forward for tomorrow's pensioners and, at the same time, to give today's pensioners the security that they deserve, which, in my view, this Government should continue to deliver. Affordability and sustainability must be at the heart of our consideration.
	We must also be aware, however, that because of the way in which pensions policy has developed, with which I agree, and because the benefits that we provide are means-tested, a large amount of money is unclaimed by pensioners—money to which they are entitled and which the Government have allocated for pensions. The Department for Work and Pensions produces a useful example of the levels of take-up across a range of income-related benefits. The latest figures relates to 2003–04. I want to take the lowest estimate of unclaimed benefits—some estimates would be even higher. A minimum of 210,000 pensioners do not claim housing benefit to which they are entitled, which amounts to some £310 million. A minimum of 1,600,000 pensioners who are entitled to council tax benefit do not claim it, which means that at least £870 million of council tax benefit is unclaimed by pensioners. On the lowest estimate, 1,200,000 pensioners do not claim pension credit and the minimum income guarantee, which amounts to £1.6 billion.
	That is money that the Government have put aside for pensioners. If we take those three benefits together, £2.8 billion is unclaimed by pensioners. In terms of affordability, that money could be made available to pensioners. The total cost of the £200 council tax rebate is £800 million, and we should use some of the unclaimed money to support a continuation of that rebate for pensioners.

Stephen Byers: That relates to what will be my next point, on a fair deal for the pensioners of tomorrow.
	To return to the question of unclaimed benefits, obviously we must do all that we can to make sure that pensioners claim them. We all know the nature of pensioners, however—they are reluctant to go through a means-tested process, so those sums are unavailable to them. If we can make them available for universal provision—of which the £200 rebate is a good example—we should do so. However, almost £2.8 billion is unclaimed, so we should also consider those pensioners aged over 75, many of them women, who do not get the basic state pension. We all know that the age group with which we are concerned will have been at home and will not have paid their national insurance contributions—the pensioners in poverty today. If we can extend universal provision to them, at a net cost of £1.4 billion, we will tackle what is left of pensioner poverty in our country. We can do both of those within the amount of money unclaimed at present.
	As for the future, I accept that there is real concern about the nature of means-tested provisions. I approve of the approach that we have adopted since 1997—it is the way in which to ensure that money goes quickly into the pockets of the pensioners who are in greatest need. However, it was never a long-term solution to the problem of establishing a fair pensions regime. Some of my friends here will be surprised to hear this, but I agree with Brendan Barber, general secretary of the Trades Union Congress, who said:
	"You cannot build a long-term pensions system on mass means-testing of pensioners".
	I do not think that, when we come to consider a new regime for pensions, we can continue as we have since 1997. There cannot be minor adjustments to the present regime, or incremental change. We need to think fundamentally about the sort of pensions system that we want for the future.
	I think that the tests set out by the Secretary of State for Work and Pensions are the right ones. Does the new system promote personal responsibility? Will it be fair? Is it affordable? Is it simple? Is it sustainable? I believe that, along with the recommendations of the Turner commission, those tests strike the right balance between the respective responsibilities of the Government, employers and employees. That is why I approve of the package produced by Adair Turner.
	I hope that when the Government produce their White Paper, they will be prepared to embrace the thrust of Turner's recommendations. In my view, the Turner report provides the blueprint—the package of measures that can deliver fairness and justice for pensioners long into the future, which is what we should be seeking.

Stephen Byers: I take my hon. Friend's point, and I have some sympathy with it. I hope that the Government will not duck that issue, among others, when the White Paper is published. I hope that they will take it on and that when we talk about a fair and just system for the future that is affordable and sustainable, they will consider issues such as tax relief. That is one way in which we can secure a system that is grounded in fairness, which is what we must try to achieve.
	I raised this subject today because I believe that the Labour party, in particular, cannot compromise on its duty to pensioners. We owe them a responsibility—a responsibility grounded in the traditional values of the Labour party. The Labour party is about ensuring, and recognising, that we can achieve far more when we act together than we ever can as individuals. Pensions present a good example of the way in which the people of today who create the wealth should look after those who, in years gone by, have provided for our country in good as well as more difficult times. It is for the Labour party to repay its debts, and I believe that a pensions policy based on the thrust of the Turner proposals represents a very positive solution.
	Let me make a final comment on the Budget. I was delighted that the Chancellor reaffirmed the commitment to eradication of child poverty by 2020, and the commitment to halve the number of young people in poverty by 2010–11. He proposed increases in child benefit and more help to get single parents into work, lifting another 300,000 children out of poverty. That will make an important contribution, but we need to do more. We can build on that proposal, but the important message of the proposal and, indeed, the Budget is that we cannot have a strong economy if we have a weak and divided society.
	This Budget and this Government are committed to social justice and wealth creation working alongside each other. Long may that continue.

Peter Luff: It is a pleasure to follow the right hon. Member for North Tyneside (Mr. Byers), just as I followed him around India a few weeks ago. I found rather more in his speech than I expected with which to agree, although I did not think much of his opening remarks. He knows as well as I do that the stability we now enjoy is a product of the hard-won supply-side reforms of the 1980s and the economic policies of the early 1990s, and that the pensions crisis of which he rightly spoke is entirely the making of the present Government.
	I want to discuss two themes that are central to the Budget, education and international competitiveness. They are linked by the key theme of the skills that we need to make the United Kingdom fit for purpose in the 21st century. I will not succeed in saying all that I hoped to say in 10 minutes, but I have been helped by two excellent speeches—by the hon. Member for Brent, East (Sarah Teather), who spoke of the skills issues that face our country, and my hon. Friend the Member for North Essex (Mr. Jenkin), who spoke of the challenges of globalisation and the response that we should make.
	I wish to make three key points, the first of which is local. Worcestershire schools suffer monstrous discrimination, and the Budget does nothing to change that. The second is national. As the hon. Member for Brent, East said, the Chancellor was right to emphasise the importance of skills and education, but I doubt that his approach is radical enough to rise to the challenge. The third is international, and relates to what was said by my hon. Friend the Member for North Essex. The country has not yet woken up to the challenge of globalisation and, I fear, is sleepwalking complacently towards mediocrity.
	My conclusion is that the Budget does some sensible things and many foolish ones, such as introducing retrospection in inheritance tax rules and causing massive inconvenience by bringing forward the date for completion of income tax self-assessment forms. It simply does not match the scale of what is happening in the wider world: as I have said, it is a Budget for mediocrity, not excellence. It is a Budget of councils, reviews, consultations and even national debates, but not of the action that we need in order to take on the world.
	Why is that? The Chancellor fails the test of the greatness to which he aspires because he is a compulsive meddler. He also thinks that he knows how to spend our money better than we do. His dogmatic insistence that the growing levels of public spending—or investment, as he mischievously describes it to make it sound even more virtuous—are compatible with our country's international competitiveness is simply wrong. We should be sharing the proceeds of growth between increased spending on public services and tax reductions, as my right hon. Friend the Leader of the Opposition rightly proposes.
	I am afraid that, for all his fine phrases, the Chancellor is not a big-picture man. He is a micro-manager, and micro-management often makes life very difficult for business. It sometimes brings disaster in its wake for enterprising companies. Let us look at what the Chancellor has done to Evesham Technology in my constituency. There is a long letter on his desk—I hoped to quote it at length, but I have not enough time—from the finance director. In his persuasive letter, he says that the home computing initiative
	"relies on this exemption"
	—from income tax—
	"launched a mere 27 months ago in a blaze of publicity by Patricia Hewitt."
	It has gone.
	"It took from January until June 2004 for the model"
	—for delivery of the system—
	"to take shape with the creation of HCI compliant documentation, marketing materials, web sites, order entry portals etc and the first real revenues . . . did not start flowing until July 2004.
	In May 2005, due to the changes in the Consumer Credit Act, the documentation had to be redrafted and further legal costs incurred."
	The scheme was successful, however, so Evesham Technology
	"invested over £100,000 in new printing equipment . . . £50,000 in display equipment"
	to demonstrate it, but both investments are worthless today.
	The tragedy is that the company was
	"in the final stages of implementing a new manufacturing line to assemble LCD monitors in the UK. That investment and the jobs it would have created is now extremely unlikely to happen."
	The Chancellor's micro-management is to blame—constant, endless tinkering with the tax system, instead of the stability that we crave.
	My other local point relates to education. I am a reasonable man and I freely admit that school spending has risen sharply under this Government. Capital investment is higher that it was in 1997—owing, of course, to the golden economic inheritance of this Government. I hope that they will provide a Conservative Government with the same ability to increase expenditure on education. I welcome what has happened, but I do not welcome the way in which Worcestershire pupils are being left behind in spending per pupil. I complained about that under Conservative Governments in the past, but it has become worse under this Government. In 1997, the cash gap between funding per pupil in Worcestershire and the national average was £150; now, it is more than £400, and it is a whopping £840 in the case of neighbouring Birmingham.
	Given that the new Secretary of State for Education and Skills was educated in Worcestershire and that the Minister for Schools is a Worcestershire MP, I thought that things might get better, but I was wrong. Their plan for the next two years is for Worcestershire again to have below-average increases in funding per pupil, thereby making a difficult situation worse. What is more, if I have read the Red Book correctly, propositions for the distribution of funding as listed in paragraph 6.58 mean that local education authorities that already get high funding levels will get still higher ones.
	I have wondered why that should be so. Why should this discrimination against my county continue? I thought that perhaps those in London just did not understand the scale of urban and rural deprivation in my county. Perhaps they view it as some rural paradise where affluent upper-middle-class parents send their children to fine private schools and live in large mansions and farmhouses, far from the gritty reality of urban Britain. Perhaps they do not understand the level of poverty and deprivation in Redditch, Worcester, Wyre Forest and, yes, in my constituency of Mid-Worcestershire. How else can we explain the bewildering paradox whereby we are considered too rich to get a decent amount of cash for our kids, and too poor to qualify for the area cost adjustment?
	My suspicions were confirmed in a dramatic way by a presentation only two weeks ago by Dugald Sanderman, joint head of school and LEA funding for the F40 group of local authorities. He chose to illustrate their funding needs through a picture of a large house in leafy Evesham—ironically, it is, I think, lived in by a Labour supporter—set against a background of tower blocks. In another picture, taken for a marketing brochure marketing the towns of Worcestershire, the lovely sights of my constituency, which I invite every Member to come and see, are set against a bleak urban landscape. It took me just a few seconds on the internet this morning to find a house in Birmingham that would have served just as well as a counterbalance to that urban shot. It has six bedrooms, four bathrooms, four reception rooms, a reception hall with library, a gallery landing with seating area and a heated swimming pool, and is selling for £1.4 million.
	That was the most dishonest presentation of the reasons for education funding distribution that I have ever seen. Dr. Goebbels would have been proud of it, and Dugald Sanderman should hang his head in shame for making such misleading presentations. It was of course Goebbels who said that if one tells a lie big enough and keeps repeating it, people will eventually come to believe it. I will not let this lie gain any ground. It must be squashed. We need a fairer deal and I hope that it will be forthcoming.
	The hon. Member for Brent, East spoke well on national skills and I share her concern. I shall restrict my remarks to one simple point. Lord Leitch said at the time of his interim report:
	"The scale of the challenge is daunting. Delivering current plans will be difficult. Even then, it will not be enough to supply the skills that employers, employees and our nation need in order to advance. The UK must become world class on skills—for all of our sakes."

Ann McKechin: I am grateful for the opportunity to contribute to today's Budget debate. Clearly, today's theme has been education, but the Budget's overall theme has been how we cope with rapidly changing world circumstances.
	I welcome the particular emphasis this year on climate change and the strong indication that this policy area will be further developed over the coming weeks and months. A number of Members have already urged the Chancellor to go further, and I agree with many of their sentiments. However, as my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) pointed out last week in a thoughtful and well-argued contribution, it is also necessary to reach as far as possible a general consensus both inside and outside this place on how we are going to make the necessary changes.
	A recent poll about people's perceptions of climate change, carried out by the university of East Anglia, showed that a very large percentage of people—more than 90 per cent.—recognised that climate change was a major problem. But when asked who should deal with it, most pointed to multilateral institutions and to their own Government, rather than to action on the part of individuals. However, we know that we can make significant progress in reducing energy demand and, in turn, carbon emissions if we can greatly increase domestic energy efficiency and change entrenched daily habits such as the so-called school run.
	Our Government clearly have a role to play in moving energy efficiency forward, not only by setting better standards in building regulations, as was done in the Budget, and providing lower tax rates for more energy efficient technology, but also at times by encouraging a different mindset in our citizens. I am reminded of the long, often fractious debate about smoking in public places. I observed the implementation of the ban in Scotland just yesterday; there was surprisingly little fuss and already a growing perception that the vast majority of the population, including the majority of smokers, now see the ban as a necessary step to better health for the country as a whole.
	We need to expand the debate on climate change to all sections of our community, but we also need to accept that it will include making tough decisions, which is why I welcome the indexing proposals for the climate change levy. I hope that the Government will feel able to go much further both on vehicle taxation, especially as the relative cost of driving has gone down in recent years, and on aviation.
	In the longer term, we need to consider a much larger expansion of congestion charging and investing more in the Cinderella of public transport—no, not cycling but buses. I am delighted that the national bus scheme for the elderly and disabled will be extended to England. As Members are aware, Scotland will start its scheme next month, although I hope we can manage to make sure that if senior citizens want to travel between Gretna Green and Carlisle, that will be included in the scheme. We already enjoy a free scheme throughout the whole of Strathclyde, which has made a tremendous difference to the quality of life for many of our senior citizens. Some ingenious journeys have been undertaken. I heard last week that two ladies from Kilmacolm in West Renfrewshire regularly take a bus via Glasgow to Campbeltown to buy fresh fish—a journey of more than 200 miles.
	On a more serious note, greater use of buses by one section of our community will help to change the mindset about that mode of transport and will, I hope, also encourage younger generations to see its benefits for their daily journeys. I impress on the Government, however, that both in Whitehall and in the Scottish Executive we need to tackle the continuing problems caused by the deregulation of bus services, so that services are seen to be regular and reliable at all times of the day and night, to encourage greater use.
	I welcome the continued support for microgeneration. We need to show long-term support for that industry if its market share is to grow to the extent that it becomes part of our everyday choice in providing energy for our local communities. Unfortunately, as I found recently, it is still difficult to purchase the right type of energy-efficient light bulb. If anyone has managed to buy the equivalent of a 100 W bayonet bulb, they are doing well because those bulbs are certainly not to be found in most shops.
	We should be looking more widely at the construction of major developments. We need to reach a point where they create an energy demand on our national network as near zero as possible. There are some good examples that we can follow from this country and around the world, and we need to ensure that such provisions are fully integrated in our planning and building proposals. Today we heard the good news that wind turbines are being installed faster than predicted, which shows a real interest and keenness to pursue that market.
	My second point relates to globalisation, which has already been broached by the hon. Members for Mid-Worcestershire (Peter Luff) and for North Essex (Mr. Jenkin). Our economy is heavily dependent on world trade, particularly in our services sector, so any rise in protectionist sentiments is clearly of concern. Symptoms of the problem are already evident in the current World Trade Organisation negotiations, which at best will achieve a much narrower set of agreements than was originally hoped. The underlying problem is a growing disconnection on a global scale between growth and employment creation rates. The UK's main strength over the last eight years has been to focus our principal priority on creating more jobs, but that picture has not been replicated elsewhere.
	Various speakers have mentioned the growing markets in China and India, but although the Chinese economy continues to grow at 9 per cent. a year, the country has not reduced its national poverty levels since 2000. Despite the explosion of its export market throughout the world over the last five years, the number of its people employed in manufacturing has reduced, so I suggest to Opposition Members that the Chinese may have to focus quickly on an increase in taxation and the creation of a vibrant and strong public sector if they are to deal with the vast number of urban unemployed that will face them in the next few years.
	The consequences will undoubtedly affect us all, which is why it is crucial that at international level, whether through the EU, the International Monetary Fund or the World Bank, we consider how to align labour policies more closely with developments in trade, and ensure that we have the ability to react quickly to rapid change. That is why the specific measures announced on extending research and development support to medium-sized enterprises and the strong emphasis on supporting science at all levels is so crucial.
	A number of those measures are specific to England, but the move to enable pupils to study three sciences at GCSE is sensible. There is growing concern about the small number of undergraduate students choosing science, and we need to reverse that trend. Last Friday I had the pleasure of opening new X-ray labs in the chemistry department of Glasgow university, and when I discussed that issue with the staff they said that they had no problem in recruiting students. The key to that was the fact that their four-year course allows students to specialise after their first year at university. The world of university science is very different from that of the school, and choices can be made better when students are following their university course.
	Glasgow offers a good example of universities working together. Under the Westchem initiative, Glasgow and Strathclyde universities share their resources and offer a joint service to the private sector, ranging from BP to local small and medium-sized enterprises. As was pointed out earlier, there has been a considerable increase in investment, with new cutting-edge equipment that allows enterprises to compete at a global level. We need to make sure that such initiatives are expanded throughout the UK.
	As the hon. Member for Brent, East (Sarah Teather) said, the Government have made radical proposals for university research funding—the new health research fund and changes to the research councils—and I would be grateful if my hon. Friend the Financial Secretary could indicate how the Government intend to consult the devolved authorities when working through those plans, to co-ordinate policy throughout the whole UK.
	I commend steps to increase training for those with no or low skills. If we are to remain a competitive economy we need to ensure that everybody has the opportunity to move out of low-paid work. That relates particularly to women, who represent the vast majority of those in low-paid work. The equality agenda is also a prosperity agenda for this country, and I commend the Budget.

Richard Spring: I accept that point, although I also recognise that the problem appears greater in the southern half of the country even in areas of high population. That is exacerbated by the fact that the tremendous changes in the bureaucratic structures of the health service have played a huge part. If the Chancellor is to give out huge sums of money, they should be followed by changes in the organisation and structures of the health service.

Ian Gibson: The Chancellor has obviously been spending his time at Cape Cod in Massachusetts to the benefit of this country by talking to people at the Massachusetts Institute of Technology about subjects such as innovation and the creation of new products and so on. He has brought that to this country in an interaction at Cambridge university with MIT, whereby young people can interplay between the two institutions on their courses, come up with new, bright ideas and show a way forward for international co-operation in research. Again, that is mirrored across the world, as we find that published papers on industrial and scientific matters include the names of people not just from one country, but sometimes from 12 countries.
	A huge amount of interaction is going on. Academics are pretty good at knowing who is doing similar work, interacting with one another, deciding who is best at it and so on. I serve on a Department of Trade and Industry taskforce committee, and the Government are now considering which countries to interact with in different areas of scientific endeavour on everything from cancer research and health services to innovation and the development of various products.
	The innovation agenda is not easy to carry out—it is a very complex process—and I want to concentrate partly on the education end of it. It is easy to have very bright young people making inventions, publishing information and getting it out into the world, but turning what they find out into a product that is interesting and useful for society is something that very few countries have been able to develop.
	In this country, we talked for a long time about spin-out companies and we looked at those companies around Cambridge, Oxford, Newcastle, Manchester and Dundee. The figures show that this country has had more spin-out companies than anywhere else in the world in the past few years. There is no doubt about that, but the problem is that no one of them has turned into what we think of as a success: a big pharmaceutical company. Those companies are successes—they produce new products, such as vaccines and so on.
	This may not be appetising to Opposition Members, but we should applaud the collaboration and interaction between this country and Cuba, which is developing various vaccines. There is now an attitude in this country, which has not been present for some time, that we should interact with those other economies to produce products not just for our own country, but for other countries as well. That is to be applauded, and the Government have been part of that approach.
	As my hon. Friend the Member for Glasgow, North (Ann McKechin) said, we are doing something similar in the field of climate change, where new technologies are being developed—under pressure, of course, to bring down our CO 2 emissions, which is happening. Microgeneration and new homes with solar panels, as the Chancellor said, are very much part of understanding the science and technology engineering that is now available to improve the lot of not just our people, but people across the world.
	All that is part of a magic paper produced by the Chancellor of the Exchequer called "Science and innovation investment framework 2004–2014: next steps", but it is not a blueprint. We are not saying that we will carry out a, b, c and d, right through to z. There are experimental areas where we can improve, but there is a recognition that has never been known before in my experience of politics in this country.
	I spent my time as Chairman of the Select Committee on Science and Technology trying to find out who spoke on science and technology for the Opposition parties. I could never find anyone. They must recognise the problems associated with such issues, but the Government have recognised them for some time now and are putting more resources and effort into them.
	Innovation is a complex process to undertake. One of the factors is a well-trained, highly motivated and well-funded scientific and technological work force in universities and in our science and technology-based companies, not just those in the pharmaceutical industry. All the issues that are involved in innovation could be described in their own right—that would take a long time—but I want to concentrate on one of them.
	The hon. Member for Brent, East (Sarah Teather) talked about universities that have very many bright young people who think not just about innovation. I applaud that fact; curiosity-driven, blue-skies research is absolutely essential in creating an environment that takes people into a high-calibre university structure. This country's science and technology infrastructure is a very high level, and it will improve over the years with Budgets such as this one and other resources.

Sally Keeble: I am glad that my hon. Friend mentions those programmes, but does he agree that that there is an important problem in that the BBC shows them so late at night, at a time when most children cannot stay up to watch them?

Ian Gibson: That is an absolute factor for many people, but many other people in higher education are not there for the money. They are there for the fascination of finding out about the world, how things exists and where they came from. That is what excites people and it excites young people, too. It is just that they never get the chance to get their hands dirty doing practical work—that is the essential thing in schools. We need to have high-flying lab facilities so that the teacher is not doing things for young people but young people are doing things for themselves. When young people find something out and want to find something else out and the teacher says, "You must carry on with what the curriculum tells you to do," that is nonsense. They should be allowed to develop and explore attitudes and phenomena for themselves. That is what is missing. The science and technology curriculum in British schools is rotten. That puts young people off, as well.
	In that kind of climate, is it any wonder, that teachers will be hard to get. Some of the students I taught used to say, "Oh well, I can't get on to a PhD, I can't do medicine, I'd better go and teach." We have got to change that attitude. One of the greatest things is for a person to be able to teach a class and inspire them. That is hard work and it may not be paid well, but, by gosh, when one meets students whom one has taught or young people whom one has gone into a school and helped—many people do that now—and one sees what they turn out like, it is wonderful. I even produced a Nobel prize winner. I do not know how. I must have said something interesting at one time, among all the mess and so on.
	There is a real opportunity to be creative. I went to a dinner the other night with creative arts people. They were all making graphic designs all over the place—they were wonderful young people. I was furious because I want to go to a dinner where there are young scientists who are inventing things and getting rewarded for that with a free dinner and the odd glass of something.
	We need to consider the regional development agencies. I am in a fantastic fight with one at the minute. Why is Norwich not a science city when there are six other such cities in the country where the scientific excellence is no better or worse than in Norwich? I will tell Members why: the person who runs the regional development agency in East Anglia was good at making crisps and is good at selling holiday homes, but knows absolutely nothing about science and how it can change the world for many people.

Ian Gibson: I thank the hon. Gentleman for those questions. That is absolutely true and that is why we have to put more investment in. More and more investment is going into schools for science. There are more labs being built. I think that £60 million has been spent during the past few years. The labs in private schools are excellent. There is plenty of money there. That is what we need. It is the same in universities, too: we need to put more money in and get more technicians and technologists, and not just high flying Nobel prize winners and so on. We have to change the whole ethos in our universities.
	I finish on this note. Somebody said that nothing was being done on health. That is absolute nonsense. I have a copy of document that is quite clear about health. It talks about creating a "world-class" environment for health research and development. It says that there will be a joint document and joined-up thinking in relation to the money for health and the Department of Trade and Industry. We are going to tackle health issues, including strokes and Alzheimer's. We are going to do the research and are going to be part of that world movement. There is a lot going on and the Government are part of that and are going to employ an independent person—a tsar—to make things happen. At last, we are going to have a joined-up health research and development budget.

Stewart Hosie: I do not want to pour cold water on that wonderful speech, but I might bring Members down back down to earth ever so slightly. The Budget was based on a 2 per cent. inflation figure. I know that the retail prices index basket has to include a large number of items to come to an average inflation figure, but my constituents on low and modest wages are paying council taxes at twice that rate. The petrol that they are filling their cars up with to go to work has increased at four times that rate. They are paying gas and electricity bills that are rising at 10 times the official inflation rate. The figure of 2 per cent. bears little semblance to reality for them. For some of the heavy energy users—the businesses in my constituency, which have seen prices rise by 100 per cent. in the past year or so—a 2 per cent. inflation figure is something of a fantasy compared with the 25, 26 or 27 per cent. surcharges that they are having to put on the cost of goods as they leave the factory gate.
	The Budget was very thin. The Royal Bank of Scotland described it as "Heavy on Light Measures". It also analysed it as a modest "give-away" of some £380 million in the forthcoming year, with a net tightening of £740 million over the course of the next three years. That means that the Chancellor took 61 minutes to announce an adjustment of perhaps of 0.07 per cent. of total receipts. However, even that RBS analysis masks the multitude of minor micro-management adjustments that were announced and further disguises the many omissions from the Budget.
	One key omission was the lack of any significant measure to encourage more investment at home. The differential between investment from the UK overseas and investment from overseas coming to the UK was some £21 billion last year. It seems extraordinary that £3.47 billion of UK money was invested in UK offshore islands and some £6.27 billion was invested in Bermuda. Perhaps the Chancellor's biggest omission was his failure to consider a way of closing that gap to stop that £10 billion or £11 billion being parked—sorry, invested—in Sark and Bermuda.
	We also note that the pre-Budget report increased the tax in the North sea by some 25 per cent. Last week's Budget was an opportunity to redress some of that and to encourage the exploitation of heavy oil, which sells at some $10 a barrel less than other oils, in the central North sea. It could also have encouraged the development of new resources west of Shetland and exploration in the very deep waters west of Scotland. However, the Chancellor chose not to do that. Instead, through changes to taxation on blended oils, he actually grabbed £200 million. If that £200 million had been invested rather than grabbed, the Government could have removed the supplementary charge from tariff contracts to encourage the development of the small fields that are required to use existing technology, levelled the playing field for new entrants by increasing the extent to which unrelieved allowances are reimbursed, extended research and development tax credits to North sea activities, encouraged investment in heavy oil extraction and introduced a floor of $30 a barrel below which the supplementary charge would not apply. However, the Chancellor took the £200 million instead, and thus set back exploration and development and, potentially, threatened jobs.

Stewart Hosie: I am not a defender of big oil. I am here to defend jobs and future exploration. During my recent meeting with UKOOA, it made much the same point, but went on to say that some delay in exploration and development will occur as a result of the taxation that is being levied. I am happy to compare my meeting with UKOOA with the hon. Gentleman's at a later date.
	Having made my points about oil, there were things to welcome in the Budget, not least the joint study with Norway on carbon capture. As I have said previously, that will commence with emissions from power stations to utilise some of the 750 gigatonnes of capacity in wells in the North sea. However, if the Government were serious about encouraging the use of more renewables in the fight against global warming and climate change, the Budget would have been the opportunity to address an imbalance in connection charges, which are the single biggest financial obstacle to efficient, large-scale, offshore wind production of electricity as part of the UK's energy supply. It is ludicrous that generators can be subsidised by £8.20 a kW in the south of England, yet perhaps charged £24.89 to connect to the grid in the north of Scotland. That problem must be addressed if we are seriously to examine the massive potential for offshore wind and help to tackle climate change and global warming.
	I said at the outset that the Budget was predicated on an inflation rate of 2 per cent, but it also seemed to be predicated on the massive expansion of public-private partnership schemes. Although those schemes might seem attractive to the Government right now in accounting terms, if they are anything like the scheme for the royal infirmary of Edinburgh, under which a building with a capital value of £184 million will end up costing the taxpayer £1.26 billion, I suspect that they will be far from cost-effective in the long run. Indeed, such schemes might burden future generations of taxpayers with a massive debt.
	A Budget that is predicated on the expansion of such PPP schemes, in addition to selling off some £30 billion of assets, five-year borrowings of £175 billion and a 5 per cent. cut in departmental spending, is fraught with danger. It is doubly fraught if it is based on a 2007 growth forecast of between 2.75 and 3.25 per cent because the low end of that range is higher than the industry consensus. If the Government's forecasts on growth and the tax take are wrong—we know that they were last year—the economy could well be on a knife edge. We would be mortgaged to the hilt and massively in debt, with the family silver sold off. With spending forecast to rise by £25 billion, £26 billion, or £27 billion every year until 2010–11, public sector debt forecast to rise year on year to £610 billion by 2010–11 and the treaty debt calculation due to rise year on year to £700 billion by 2010–11, there will be no room to manoeuvre if any of the calculations are wrong. No amount of changing economic cycles or fiddling golden rules will hide that.
	We welcome the announcement that the Office for National Statistics is to be made fully independent, but also are slightly intrigued, given that the Chancellor, speaking to the Select Committee on the Treasury last March, denied that it was not fully independent in the first place. Indeed, he railed against the "unfortunate allegation" that the ONS was not independent.
	The ONS must be truly independent, not simply to ensure accurate, robust and reliable UK figures, but to ensure that it collects the correct data so that we can do a proper assessment of the Scottish, Welsh, Northern Irish and English regional economies as well. That is vital, especially for us in Scotland. We recently identified three things for which English-only spending was attributed to Scotland. The numbers were simply fiddled and the accounts looked wrong. Those three things were the moneys that went to inward investment for England, to the English Tourism Council and to the English Prison Service. It was right and proper that all that money was spent wholly in England, and right and proper that none of it was spent in Scotland. It was ludicrous, therefore, that some of it should have been calculated or assessed as unidentifiable and an allocation then awarded to Scotland for spending that did not take place.
	There is a further reason why the ONS must be independent. The Department for Work and Pensions was asked to justify allocating £60 million of European structural funds expenditure to Scotland. It told us:
	"The allocation within the limit Departmental Expenditure Limit . . . over country and region . . . is based on DWP staff numbers in those areas."
	Every penny could have been spent in Scotland, or none. The truth is we do not know because the money was allocated on the basis of how many DWP staff were employed in the nations and regions of the UK.
	We welcome moves to extend the research and development tax credits, but with UK R and D at 1.1 per cent. of GDP, it will do little to redress the balance against Japan, Germany and the US, with figures over 2.5 per cent., and nothing to redress the balance against Denmark, Sweden and Finland, which sit at 2.6, 3.9 and 3.5 per cent. of GDP respectively.
	We also note with dismay that council tax assistance for pensioners has been removed this year and are shocked, once again, that the link between pensions and earnings has not been restored. I noted that the right hon. Member for North Tyneside (Mr. Byers), in his leadership speech, mentioned moving towards a fairer citizens pension, and I agreed with much of what he said about that.
	I also noted in the Chancellor's Scottish press release mention of 400 civil service jobs being relocated to Scotland. I recently asked every Department how many jobs had been relocated to Scotland in the past five years. The answer was 94. I am not sure where the round number of 400 came from. Perhaps he used the same rigorous analysis as he did to calculate the Gershon savings.
	It is also disappointing that there was little mention of manufacturing. Some 100,000 Scottish manufacturing jobs have gone since Labour came to power. As the Government know, manufacturing production in Scotland has shrunk for three full quarters. There is a full-blown manufacturing recession. It is disappointing that they have not chosen to debate that and disappointing that a solution was not mentioned in the Budget or its documentation.
	Finally, in terms of Scotland, because mention of it was thin on the ground, there is £87 million in Barnett consequentials. That is £15 a head over two years. In a year when the Government are taking £2,000 a head out of the North sea, it seems a poor deal indeed.

Jim Cunningham: Wherever possible we must work towards harmonisation in the UK, and free travel is one service in which we can achieve that. Most people, including pensioners, like to travel, so why not offer free extended travel across the border? From certain parts of Northumberland it only takes an hour to travel to Edinburgh, which enhances the case for free travel.
	I accept that the Government have done a great deal over the years for pensioners. However, as my right hon. Friend the Member for North Tyneside (Mr. Byers) said, politicians from all parties must stop playing political football with pensions and achieve consensus so that we can solve the problem. I do not accept that it is all the Chancellor's fault, because there are a number of factors at play. Nevertheless, there is a pensions problem and people up and down the country are awaiting the outcome of the Federal-Mogul case. Some hon. Members will have constituency experience of that case, as many people have been waiting two or three years to find out the future of their pension. Federal-Mogul is locked in the American courts, so I welcome the fact that the Government established the Pension Protection Fund. However, we must consider whether we should increase that fund, as there will be many demands on it in future. I believe that we should certainly look at ways and means of doing so.
	I recognise the Government's tremendous investment in the health service, but we must be extremely careful about reorganisation. In the midlands, we believe that the important thing is not to lose touch with the sharp end. Whether it is the reorganisation of the police force or the health service in the west midlands, we must not lose touch with the sharp end, otherwise the public will become disillusioned with the service that we are trying to provide.
	The other issue that is causing concern in places such as Stafford is the amalgamation of the ambulance service. People there think they have a very good ambulance service and are worried that if it is amalgamated with the west midlands service, they may not enjoy a service of the same standard in the future. We west midlands politicians must continue to put pressure on the Secretary of State to make sure that that does not happen.
	We cannot duck the issue of budget deficits in the health service. Those are not necessarily caused by the Government. The introduction of any new system—in this case, a system of payment by results—inevitably causes turmoil. That is recognised by most people who know about change and management. A further problem that has emerged in the health service, although we do not yet know the scale of it, arises from the use of a different method of accounting. It appears that in some instances deficits have been hidden for a number of years and are only now coming to light. The management of the health service needs to be sorted out, and its financial structure must be better managed and accounted for. I hope that compulsory redundancies can be avoided and that we can get some form of agreement with the trade unions.
	We heard earlier about a possible series of strikes over local authority pensions. We must get talks going to resolve the matter. It is not in the interest of those who will receive the pensions, any more than it is in our interest, to see such disputes continue. People feel that their pensions are to be changed, despite promises made to them by employers. We should repeat to the public sector what we have said to private sector: employers should try, as far as possible, to meet those aspirations and the commitments that they gave.
	Finally, the Budget was steady—some might say neutral. It contained some encouraging items, such as nursery provision and an increase in family tax credits. The Government have continued to focus on poverty. Britain might be wealthy but there are pockets of great social deprivation, and as politicians of whichever party, we should never lose track of that. I welcome all the measures in the Budget that deal with social deprivation.

Philip Dunne: I remind the House of the interests declared in the register against my name.
	The matter that I draw to the attention of the House is the credibility of the Chancellor in the context of his Budget speech. I shall highlight a few issues that were included in his speech and a few that were not. On the subject of today's debate, education, there is a credibility issue relating to the skills gap to which a number of hon. Members have referred.
	I am pleased that we have had an opportunity to focus on the skills gap, not least because in the survey of more than 1,000 businesses that I undertook in my constituency in the run-up to the Budget, the overwhelming cause of concern was the poor quality of school leavers presenting themselves for employment. This is not a criticism specifically of the schools in my constituency, which do a very good job. However, of the businesses that responded to my survey, 64 per cent. raised skills as the main problem for them, and of that group, 72 per cent. said the problem was getting worse, not better. This is a fundamental issue for the competitiveness of the United Kingdom as we move forward, and it needs to be addressed.
	Instead of raising the skills of our work force, one of the ways in which the Government have been tackling the skills gap in this country has been to import skills from elsewhere. For example, my hon. Friend the Member for Shrewsbury and Atcham (Daniel Kawczynski), whose constituency borders mine, regularly reminds the House that the shortage of dentists has been filled by dentists from his homeland, Poland. I have always taken his comments with a pinch of salt, but the point was graphically illustrated by the recent publication of an e-mail in which the British ambassador to Warsaw, Ambassador Crawford, stated that Her Majesty's Government have
	"created more jobs for Poles in the past year than the Polish Government".
	Turning to school funding, much has been made of the announcement of extra money for schools and the aspiration to raise school spending per head close to the level achieved in the independent sector. I welcome more money for schools, although I have not been overwhelmed by the increase, which appears to be close to 1 per cent. of the total schools budget, but it is welcome none the less. To echo the comment made by my hon. Friend the Member for Mid-Worcestershire (Peter Luff), I urge the Government seriously to examine the allocation policy.
	In Shropshire, our children receive approximately £3,300 a pupil—that places the local education authority 10th from bottom of the 150 education authorities in this country—which is barely 75 per cent. of the average spending per pupil in this country as a whole. One area in my constituency is among the top 25 most deprived areas in this country. The issue does not solely relate to urban areas, because deprivation occurs in rural areas, too, and I urge the Government to examine the funding formula.
	On further education, the Secretary of State for Education and Skills has referred to a level playing field, which I would welcome, too, but I do not welcome the levelling of buildings. In my constituency, Bridgnorth college was closed last year and the site is being prepared for levelling. I urge the Financial Secretary to make a commitment in his winding-up speech that the proceeds raised by the sale of the sites of colleges of education that are being shut down in rural areas will be reinvested in the area where the facilities have been shut rather than being transferred to supposedly more deserving areas, which leaves even less provision for those in rural areas.
	The hon. Member for Dundee, East (Stewart Hosie) has welcomed the Chancellor's announcement of independence for the Office for National Statistics. Like all Conservative Members, I welcome that decision, because it was a Conservative policy, and it is reassuring to see the Chancellor in this, as in so many other areas, picking up our policy—the current consensus in politics is clearly working. That change was needed because of the credibility gap, which is of the Chancellor's own making.
	Since the Budget, many commentators have referred to problems with the presentation of statistics. On Sunday, The Business carried an article in which its correspondent, Allister Heath, discussed the way in which the Chancellor has chosen to portray productivity in this country as improving rather than the actual trend, which is declining. When the Chancellor was appointed too many years ago, he saw productivity as one of the main benchmarks for his success, and the article discusses that point:
	"His main trick was to break down the UK's productivity performance into three periods: 1972 to 1986; 1986 to the first half of 1997; and Labour's election to the third quarter of 2001, a period he claimed to be the first half of the current cycle. This allowed him to claim that the growth in output per worker had hit 2.13 per cent. a year in the final period against 1.93 per cent. and 1.5 per cent. in the previous two . . . The truth, as the official figures for output per worker reveal, is the exact of the opposite of the great performance that Brown chose to boast about. Productivity growth averaged 2.6 per cent. a year between 1992 and 1997",
	which was the last period of Conservative Government, and fell to
	"2.1 per cent. a year between 1997 and 2001."
	It declined further to 1.3 per cent. between 2001 and 2005. In the past 12 months, it has declined even further to 0.4 per cent. So much for the Chancellor's productivity growth. I am looking forward to how the ONS will portray that.
	I turn to something that I suspect arrived in the Budget as an afterthought—the assault on the trust industry. Several Members have referred to the impressive growth in, and our reliance on, financial services. The trust sector is a critical part of that. By seeking to impose such significant taxation changes on the accumulation of maintenance trusts and other trust types, the Chancellor will drive a coach and horses through that industry and force it offshore. He may not have appreciated that many of these trusts have nothing to do with inheritance—they are to do with protecting assets, initially for minors and then for other young people while they are still in their formative years. Some were set up during the crusades to help estates not to fall into the wrong hands in the event of knights being toppled from their chargers overseas. This is a serious measure to propose with the flick of a pen.
	In the brief time that I have left, I should like to raise three issues that were not mentioned in the Budget. First, there is the credibility gap over pensions. The right hon. Member for North Tyneside (Mr. Byers) devoted much of his speech to that. I think that he is being a bit economical as regards the way in which the Chancellor has chosen to present some of the pension-related measures that have come out of the Budget. A year ago, the Chancellor made great play of the fact that the council tax rebate for pensioners was being doubled from £100 to £200. That was not mentioned last week when it was abolished, with the result that pensioners' council tax will have soared by more than 20 per cent.
	The right hon. Member for North Tyneside also talked about Labour's responsibility for dealing with the pensions crisis that has been created. There is indeed a responsibility. I look forward to seeing what happens with Turner and deeply regret that the Chancellor did not refer to that.
	I reiterate my concern that the Chancellor did not mention the NHS in his speech. I hope that he will be listening tomorrow when protestors from all over the country come to highlight the cuts that are being made in our community hospitals.

Kitty Ussher: I am grateful for the opportunity to speak in this debate. I will keep my remarks well within the 10-minute limit to allow other hon. Members to contribute.
	I want to focus not only on education but on manufacturing policy, and particularly the interrelationship between the two. My basic point is that I find nothing more heartbreaking than able, well-educated young—or not so young—people in my constituency being faced with the stark choice between leaving their community in order to get a decent job or forfeiting that opportunity in order to be nearer to their families. People should not have to choose between their community and their career. Social justice does not depend on the town one calls home—good jobs must be available wherever people happen to live.
	I come first to manufacturing. As we have more than doubled the national average of people employed in manufacturing in Burnley, I am firmly convinced that British manufacturing can succeed in the 21st century. As an Amicus MP, I am proud to be part of the trade union that campaigned sincerely and hard for that success. I simply do not agree with people who say that manufacturing is something of the past—a 20th century preoccupation that is destined to be replaced. Although the sector may have declined as a proportion of our economy, it is still strong and important, and with the right policies it can have a bright future.
	The best of British manufacturing is definitely still the best in the world. I am proud to say that we have some of that excellence in my constituency, with companies such as Baxi Potterton, Aircelle, Tenneco Walker, TRW and Smiths Aerospace, to name but a few. The challenge we face, whether in Burnley or in Britain as a whole, is to ensure that we innovate to stay ahead in a fast-moving, competitive world. We do not want to—and we should not—compete on the basis of wages. Instead, we must compete by simply being the best. I want consumers around the world to choose British—preferably Burnley—products because they are the smartest, cleverest and most desirable bits of kit that money can buy.
	To achieve that, our firms need continually to innovate and train to stay ahead of the competition. Most of the responsibility for that lies with managers. After all, they need to do it to satisfy their shareholders, but the Government can help and the Budget does that. It helps by extending the research and development tax credit to companies of between 250 and 500 employees; reaffirming our commitment to science and extending the remit of the technology strategy board; streamlining our support for small businesses and increasing the focus on the effect of Government procurement on the economy; supporting the manufacturing advisory service, which, in the north-west alone, has helped companies achieve £120 million in productivity improvements; and, of course, continuing to resource the regional development agencies.
	In my constituency, the RDA is leading an exciting project, which is in its early stages. It is working with the University of Central Lancashire and the learning and skills council to bring a university campus to Burnley—with, I hope, a professorship in advanced manufacturing—alongside an enterprise centre and a revamped Burnley further education college. In the world of advanced, 21st century manufacturing, the availability of appropriate skills will ultimately determine where a firm locates. That is why the Chancellor is right to make this a Budget for education. School results are already improving under the Government and we must continue the reforms so that everyone, regardless of where people live or the school that they attend, has the best possible education. I welcome the Budget's provisions to give more cash to schools.
	The main point about education that I want to highlight relates to the new deal. Although the Conservative party mocked and scorned it, hundreds of thousands of people are now in work, contributing to society and supporting their families because of the new deal.In my part of the world people are in work, but I often hear the complaint that the jobs are simply not good enough. People welcome the minimum wage, but they do not want to work in minimum wage jobs. The most important determinant of one's salary is the amount of training under one's belt. I have therefore long believed that the Government should not step away when someone enters employment. It is in the interests of Britain and the individual that the support should continue. We have conceded the principle for tax credits and we now need to do it for careers advice.
	Once someone is in work, the priority must be to get the necessary training to climb rapidly up the ladder, bring more income home and get the skills that employers need for their companies to compete more effectively. The best way to get a good job is to get a job. We have invested in lifelong and adult learning, but we can be smarter. After all, the Government know who the low earners in the economy are because they have everyone's tax records. Why not use that information, in the confines of the law on data protection, to provide individualised careers advice, training and support for the lowest earners in society—a new deal for those already in work? I warmly welcome the Chancellor's announcement in the Budget of the prospect of expanding the new deal for those in work who want to improve their skills. I look forward to the results of the review by Lord Leitch on what can be done.
	Social justice should not depend on the town we call home. We need to spread power, wealth and opportunity throughout poorer as well as richer areas. By taking action to strengthen manufacturing and give personalised help for people to access the training that they need to get the good jobs that they want, we shall move a little further towards achieving that objective, at least for my constituents.

James Brokenshire: It is a pleasure to participate in this important debate. I am also pleased to follow the hon. Member for Burnley (Kitty Ussher). I was especially interested in her comments about the role of manufacturing in British industry. Like her, I believe that there is a future for British manufacturing, but the key to that is continued investment in research and development so that we can innovate in the way in which she suggested. That flows into the general comments that I wish to make about productivity. However, unlike the hon. Lady, I draw different conclusions about the Budget's impact on that.
	My hon. Friend the Member for Ludlow (Mr. Dunne) cited many statistics, to which I would add one more. Output per worker failed to increase at all in the year to the third quarter of 2005, adding to the slip in productivity that we have seen over the past few years. The emphasis on productivity is essential for the future of jobs and wealth creation in this country, in terms of ensuring that we have a growing economy to which we can positively look forward. A number of elements will influence our productivity. One is research and development, to which I will return in a moment. Another is the focus on skills. We must ensure that we have a work force that is fit for purpose for delivering the productivity growth that will be essential if we are to compete in the global economy.
	The Government have announced their White Paper on further education today. They have obviously recognised the problem, in that they state:
	"The number of adults in the workforce without the skills at Level 2 for productive, sustainable employment in a modern economy is much too high: in that area we rank 17th out of 30 countries."
	However, the situation is even more challenging than that might suggest. We need to look forward to what will happen in the future, and Lord Leitch's interim report on the country's long-term skills needs to 2020 is extremely informative in that regard. He highlights the fact that improving the skills only of young people will not be enough, given that 70 per cent. of the working-age population in 2020 will have already completed their compulsory school education, and that half the 2020 work force is already over 25 years old. Lord Leitch states:
	"These demographic changes make it essential to improve the skills of older groups in the workforce."
	I entirely agree with that. It is a pity that the Government have missed the opportunity in either the Budget or today's White Paper fully to address the need to invest in skills for older people.
	Sir Andrew Foster's report on further education colleges highlights that 14 per cent. of adults of working age have no qualifications, and that more than 5 million adults have literacy and numeracy skills below level 1. Lord Leitch predicts that, by 2020, without significant additional steps being taken over and above what the Government are proposing,
	"at least 4 million adults will still not have literacy skills expected of an 11 year old, at least 12 million will be without numeracy skills at this level (equivalent to three in ten adults) and 6.5 million will not have qualifications at the equivalent level to five good GCSEs."
	He goes on:
	"In comparative terms, the UK will continue to be an average performer—positioned, at best, in the middle of the OECD ranking".
	Globalisation continues to place an emphasis on the need to be able to compete in the global marketplace. That will involve greater flexibility in the skills of employees. During the course of an employee's lifetime in the workplace, there will be a continuing need for them to change and to be flexible. That is going to be more difficult for those who do not have basic numeracy or literacy skills. According to the CBI, eight out of 10 jobs require basic competence in literacy and numeracy. Then there is the personal impact of the lack of those skills on individuals. Many employees without basic skills in reading, writing or adding up live in daily fear of being found out. They do not take promotion for fear that they will be unable to meet the challenges involved. They are afraid of being found out and perhaps losing their jobs.
	Those are the direct personal costs involved. It is interesting to hear that some companies are seeking to address the problem by offering what one might call shadow information and communications technology courses. There might be computers in the training room, but the emphasis for the employee is very much on basic skills in reading and writing, rather than on computer skills. I suppose that that highlights the ingrained challenges.
	While there is a recognition of the problems, the Government seem unable to deal with them. At the end of last year, a report by the adult learning inspectorate described the Government's skills for life programme as a "depressing failure", adding:
	"The programme is not yet meeting the needs of the most acutely disadvantaged adults it was designed to help."
	While I welcome the Budget's proposals for funding for free tuition for 19 to 25-year-olds embarking on their first level 3 qualification and the roll-out of the adult learning grant, those simply do not go far enough. As I have highlighted, half of our 2020 work force is already aged 25 and above, so will not be directly affected. The proposals do not deal with the basis skills that I have highlighted because they are pitched much higher. The initiatives do not address the fundamental issues of upskilling and ensuring that we meet the productivity challenge.
	Greater emphasis on work-based learning is needed, and employers and firms have a crucial role in making sure that their human resource and employment capital— their employees—are utilised and incentivised to the full. In many ways, the problem is that the Government have not provided enough encouragement and incentivisation for business to do that. Against the backdrop of heavy regulation and a heavy tax burden, firms are being actively discouraged from investing properly in their workers and ensuring training for their work force.
	Training is not the only area that lacks investment. To return to manufacturing, there is also a real gap in research and development, which is needed to underpin continued growth, employment and wealth. The much-vaunted Lisbon agenda to promote a strategy for jobs and growth in the EU set a target for R and D expenditure of 3 per cent. of GDP by 2010. The problem is that that target will simply not be met. Despite being an apparent advocate of the Lisbon agenda, the Government's national action plan highlights their failure by admitting only to an "ambition" that R and D expenditure will reach 2.5 per cent of GDP, and then only by 2014.
	When a lack of policy focus by the Government is combined with increased regulation and bureaucracy and an environment of increasing taxes, it is hardly surprising that industry is not investing sufficiently. The Budget announced some small-scale initiatives, but those hardly even scratch the surface. The long-term future of this country requires a rigid focus on innovation and human resources to drive the economy forward. The problem is that despite the initiatives, this Government's approach has been pedestrian. Time is not on our side, which makes it even more disturbing that despite all of the indicators and warning signs, this Budget shows no signs of any change of gear from the Government. It is a failure of leadership, a failure of policy and a failure of delivery, which I fear will cost this country dear.

Sally Keeble: To give colleagues some time, I will be brief. Rather than dealing with the macro-economy, I will address three specific points relating to my constituency. I welcome the remarks of the hon. Member for Hornchurch (James Brokenshire)—although I did not agree with his approach, I also tend to focus on the skills gap and specific issues around education. I also want to deal with the Budget proposals on sport, about which no one has yet spoken, and which are important for my constituency.
	My constituency has a large skills gap at every level: at university level, in higher skills and in intermediate and basic skills. I am pleased that University College Northampton now has full university status, and I hope that that will both plug the skills gap at the higher level and serve to drive up standards across the whole school sector. I also welcome the Government's extra funding for our schools—a total investment of £115 million in a major schools reorganisation, with the aim of improving on a history of under-achievement in schools in Northampton.
	In that context, I welcome the announcements about extra spending in schools, which will build on the Government's good track record. I would, however, like more clarification. Our schools are all tied into a major private finance initiative scheme. I hope that there will be flexibility in the structuring of the extra finance so that we can improve some of the specifications of the PFI contract, or make it possible for head teachers to work collaboratively to commission some of the improved services that they want across the board.
	I also welcome the changes proposed for further education, especially the recognition of the important role played by the sector in driving up skills standards and dealing with some of the areas of disadvantage with which other education sectors have not been able to deal. I welcome "train to gain", because I think it important to ensure that when people are in work they do not simply stay at the level that they have reached. It is well recognised that the Government have an obligation to improve their skills so that they can progress in their careers, and can retrain to meet changes in their sector of employment.
	I welcome the tighter focus on skills, but if FE colleges are to have more targeted ends, they will need more flexible means of getting there. I fear that some of the proposals in the White Paper will increase bureaucracy. That must be trimmed. If the FE sector is to achieve its target of improving skills in this important area, it must be freed in order to do so. In particular, it must be given the support that it needs to tackle disadvantage and reach some of the marginalised groups. Northampton college has been especially successful in that regard.
	I particularly welcome the extra money for sport. Sport is often seen as an add-on, but, as we have seen, it is important in improving educational achievement for some of the most disadvantaged young people by giving them a different route into school, and giving them a sense of achievement and purpose. It can also be important in regenerating the economy in certain areas. We have observed the progress made by the street football schemes, and by some of the retraining schemes to help young people in the east end of London to become referees and coaches.
	In Northampton, in preparation for the Olympics, we set up a partnership—it is cross-party, and my hon. Friend the Member for Northampton, South (Mr. Binley) has been very supportive—between the public and private sectors. It includes the district and county councils, the chamber of commerce, the schools and the university, and it is being supported very generously by Barclaycard. Its aim is to develop sports and related services in our area to take advantage of the Olympics, while considering the potential for economic regeneration, the educational issues, the culture, the legacy, the cultural festivals and the opportunities for universities. I was encouraged to hear the Chancellor's proposals for schools festivals and the expansion of sporting facilities.
	I hope that my hon. Friend the Financial Secretary will respond to those points and will listen to some of the representations from Northampton. I want to ensure that we can take some of the opportunities offered in the Budget. I want the sporting provisions to help boost our economy and give fresh chances to young people, many of whom missed out the first time, so that they can find a way back into education.
	I welcome this forward-looking Budget, which tackles some of the difficult areas in our economy, and I look forward to its implementation.

Michael Connarty: Despite criticism of this Budget from all sides, it confirms the stability of the British economy, which has taken us through some very stormy times. I point out to those who look back to previous Administrations that such stormy times would have brought their weakly based economies crashing down. I am thinking of the far east crash, the stagnation that the EU has faced for almost a decade—it could have moved forward if only it had taken the Lisbon agenda as seriously as we do—and the energy price hike that we are all suffering, but which we will see through.
	In this and previous Budgets there has been a constant focus on the supply side, which shows that the Government are on the right road. Many of today's contributors have shown that much of the scaremongering is not based on truth. The hon. Member for Hornchurch (James Brokenshire) must stop blaming the Government and take note of the fact that the UK private sector has not got the guts to make the investment that private sectors in other economies, which are going ahead of us, are making.
	My hon. Friend the Member for Glasgow, North (Ann McKechin) explained the world demographic situation, and in my view we have reached a tipping point. Within the next four to five years, through the growth of the city of Quonqing alone, more people will be living in an urban setting than a rural one. Many of them will not have jobs because the lack of concessions from rich countries in the EU, and north America has stripped away their agricultural base.
	On science, last Friday I visited a company in my constituency that emerged from the fall-out from ICI. AstraZeneca Novartis has developed Amistar, which is the world's biggest selling fungicide. Amistar and subsidiary products are being developed in Grangemouth, in my constituency, and being sold to 100 countries, thereby earning $1 billion a year.
	Some have argued that health is not on the Budget agenda, but as has been pointed out, a lot of money is being invested in health. The figures show that when the Conservatives left office, such investment accounted for 5.4 per cent. of gross domestic product; it now accounts for 7 per cent. In real terms, investment has increased from £51.9 billion to £81billion. So health is getting the investment that it needs, and if there are problems with overspend, they must be examined at a local level.
	Education is the main issue on which I want to focus, and the problem with education expenditure is that it is not evidence based. The Education Committee said in its 2004–05 report that it had some concerns about the basis of the Government's investment in academies and special schools. I raise this issue today because I do not believe that the investment is being made in schools in England that is required to turn education round; rather, money is being invested in structural change, and massive sums are being invested in academies and specialist schools, which have yet to show that they can achieve what they are supposed to achieve.
	Earlier, a Conservative Member quoted the Prime Minister, who said that the worst thing that could happen to a child aged 11 was to be labelled a failure. However, we have failed to deal with that major problem. There are now more pupils in grammar schools in England than when we came to power in 1997, yet we continue to invest in structural change. Instead, this Government should be making proper quality assurance assessments. Such a body is to be set up, and someone described it as a quango, but quality assurance is about what happens in schools, the process that children experience as they go through school, and what happens when they leave.
	I am very pleased that the Government have at last decided to introduce synthetic phonics, which were piloted in the central region of Scotland when I was a teacher. They were then used in west Dumbarton, where the percentage of children who do not achieve the required level of literacy at age 11 has been reduced to 6 per cent. as a result. The target is a 100 per cent. literacy rate. I hope that England will experience a similar benefit through the use of synthetic phonics.
	Despite "Every Child Matters", the Disability Discrimination Act 1995 and the various measures being adopted in schools, the Government remain obsessed with structure. Some of the Select Committee's criticisms have never been answered. Sums of £50,000 from the private sector are matched by £100,000 from the Government, with £126 per pupil for the next four years. That is a massive investment, yet there is no evidence to show that pupils achieve in the speciality of the school. The general standard is raised, but when such massive investments are made in certain schools that is bound to happen. Academies are not achieving what was hoped for them, yet they can cost from £25 billion to £35 billion, completely distorting local authorities' investment priorities.
	I want the Treasury to look seriously at evidence-based assessments of what we are getting for our money, and to examine what happens in schools and the outcomes for every pupil, not just for the few who have the privilege of private education or massively distorted capital investment.

Mark Hoban: The project to remodel the Chancellor was making good progress until last Wednesday. The trademark red tie had been dropped for a lilac one, a kick-start in consumer spending through investment in casual wear, and a warmer, more cuddly Gordon on display in place of his traditional position—but then he spoke, and it became clear that nothing had changed in substance. No one is more impervious to change than the Chancellor. No Chancellor is more dogmatic or closed to fresh thinking. Yet again, we saw a Chancellor fixed on spending more, raising taxes and borrowing more. He has failed to learn the lesson that he cannot increase spending on public services without reforming them first.
	I turn to some of the contributions made by Members this evening. The hon. Member for Bury, North (Mr. Chaytor) made a telling intervention on the Secretary of State. He asked when the Government would achieve their target of closing the funding gap between private and state schools. The Secretary of State's answer was evasive, but the hon. Member for Huddersfield (Mr. Sheerman) was convinced that the Chancellor would not have made such a commitment without working things out first—without knowing what he was doing. It is a pity that the Chancellor did not tell the Secretary of State first.
	My hon. Friend the Member for North Essex (Mr. Jenkin) highlighted the global challenges from India and China. He talked about highly skilled work forces. Indeed, on the day that the further education White Paper was launched, it was entirely appropriate that time and again Members on both sides of the House referred to the importance of skills and training in the work force. My hon. Friend also referred to the importance of making sure that the tax regime is competitive and addresses the global challenges posed by economies in eastern Europe, China and the far east.
	The right hon. Member for North Tyneside (Mr. Byers) made a powerful speech about the risks of extending means-testing and the impact on the take-up of benefits. He made a persuasive case for adopting the Turner report as the basis of pension reform. The Chancellor said little about that in his Budget speech, but I hope that he heard, or will read, the remarks of the right hon. Member for North Tyneside. The Chancellor made no reference whatever to the council tax rebate that he announced last year and dropped this year, so I was pleased that the right hon. Member for North Tyneside advocated its extension in the future.
	My hon. Friend the Member for Mid-Worcestershire (Peter Luff), the Chairman of the Trade and Industry Committee, used his tremendous expertise and knowledge of India to highlight the threat that it poses to our economy. He suggested that we need to adjust our economy and skills base to reflect that challenge. He also spoke eloquently and robustly about the education funding issues faced by his local authority and the gap between Worcestershire and neighbouring authorities.
	The hon. Member for Glasgow, North (Ann McKechin) referred to the importance of climate change. She touched on free bus travel. As somebody who lives in a borough where the increase in grant from the Office of the Deputy Prime Minister was less than the cost of concessionary fares announced by the Chancellor last year, I take comments about free bus travel with a pinch of salt.
	My hon. Friend the Member for West Suffolk (Mr. Spring) made a significant speech about the importance of maintaining the competitiveness of London as a global financial sector. He emphasised the need to take real action to reduce the burden of financial regulation. He also talked, with experience from his constituency, about issues with the health service. He highlighted, as several hon. Members have done during the debates on the Budget, the Chancellor's failure to mention the health service in his speech on Wednesday and his ignoring of the problems that we see in hospitals throughout the country.
	The hon. Member for Norwich, North (Dr. Gibson) spoke eloquently, as ever, about the science base and the importance of science to our country. I know that he speaks with both professional and political experience of that.
	The hon. Member for Coventry, South (Mr. Cunningham) talked about the importance of reskilling older workers. It is important in the context of today's White Paper on further education to understand what impact the commitment to level 3 entitlement for those aged up to 25 has on the provision of training for older workers. Will they be left out? I know from talking to businesses in my constituency that are concerned about the challenge posed by economies in eastern Europe, India and China that they too are concerned about what happens to workers who lose their jobs and need to improve their skill base to compete in an increasingly global economy.
	My hon. Friend the Member for Ludlow (Mr. Dunne) talked about the skills gap, and highlighted issues that he had found among employers in his constituency, including the need to raise skill levels in local people. He referred especially to the importance of ensuring higher standards of numeracy and literacy in the work force. He made a powerful point about productivity, which has fallen by a fifth since the Chancellor came into office in 1997.
	The theme of productivity was also picked up by my hon. Friend the Member for Hornchurch (James Brokenshire), who identified the need to look beyond 25-year-olds. He said that a high proportion of 19 to 25-year-olds were either in education or already in the work force, and asked how they would fare under the White Paper published today.
	I wish to question the effectiveness of Government spending in raising standards in public services, and highlight the issue of competitiveness in the global economy. The Chancellor's unswerving belief is that the more one spends, the better the results. Indeed, even the Education and Skills Committee's first report of the 2004–05 Session admits that there is no evidence to demonstrate that the spending increases under this Government have led to a step change in standards at GCSE level. Why has the increase in spending on education not flowed through to the step change in performance that our constituents and taxpayers have come to expect?
	Too often, spending priorities have been set by Departments to meet targets imposed by the Treasury, with no regard for effectiveness. Let us take just one example. Through ring-fenced programmes, the Government have spent nearly £1 billion to tackle the scourge of truancy in our schools, but since 1997 truancy has increased by 30 per cent. The money has not been spent on tackling the underlying causes, but to meet targets imposed on the Department for Education and Skills by the Chancellor.
	Even in this Budget, when the Chancellor boasts about how much additional money is going directly to schools to spend at their discretion, he also boasts that he is giving them extra money to spend on personalised learning. That money will be spent at his direction, not at the discretion of head teachers. When will the Chancellor learn that the best person to decide how money is spent effectively in schools is not him, but the head teacher?
	Until the Government give head teachers greater freedom, we will not see improvements in exam results in line with the money spent on our education system. As this year's GCSE results show, the category of state schools with the most independence from the Government, city technology colleges, have the highest value-added scores and those with the least freedom from Government interference, community schools, have the worst value-added scores. Labour Members who block reforms aimed at improving the autonomy of our schools are blocking the step change in performance that our children need for their exam standards to increase.
	On public spending, we have a Chancellor who is stuck in the past and who has yet to learn from his mistakes. As the Committee established, extra spending in schools has not translated into a faster rate of improvement in results. There continues to be a culture of central Government knowing best, and dictating how much money should be spent and how, rather than leaving those decisions in the hands of professionals. The failure to reform public services has meant that additional expenditure has failed to achieve a step change in performance. The Government have shied away from the reform of the public services needed to ensure that taxpayers get improvements in line with the increased expenditure: another lesson that the Chancellor—the road block to reform—has failed to learn.
	To fund the increase in spending, we now have a tax burden at its highest since 1984. The Red Book forecasts an increase in the tax bill of another £5.5 billion. Some Labour Members will want taxes to be higher to pay for ever higher public spending, but that short-sighted view has already put at risk our global competitiveness. Having had the 10th lowest rate of corporation tax among our competitors in 1997, we now have the 10th highest rate. The burden of taxes in Britain is now greater than that in Germany. In an attempt to plug the shortfall in public finances, we now have one of the most complicated tax regimes in the world.
	Increasingly mobile flows of capital mean that businesses have much greater choice about where they locate. Increasingly, tax is becoming an important issue in determining where businesses locate. Increasingly, businesses are deciding not to locate in the UK. Is it a surprise, therefore, that Apple, Microsoft and Oracle have located their European headquarters in low-tax Ireland? One of the factors driving the growth of the Bermudan insurance industry is its favourable tax regime compared with that of the UK.

Mark Hoban: The hon. Gentleman asks about inward investment, but he forgets that a lot of last year's inward investment flows fall from the merger of the British and Dutch branches of Shell. The business decided to locate in the Netherlands rather than the UK, because the tax regime in the Netherlands made it attractive to do so there.
	The City of London corporation's report on the global competitiveness of the financial services sector highlighted the increasing importance of the Government's decisions on personal and corporate taxes for Britain's competitive position. The head of tax at PricewaterhouseCoopers said:
	"A lot of UK tax is paid by a relatively few companies, and many of those have a choice about where they site some of their operations—the tax situation could persuade them to site discretionary additional businesses elsewhere."
	Labour Members may think that that is scaremongering, but Colt telecommunications made an announcement last month to explain why it would move its corporate headquarters overseas. It clearly said:
	"an opportunity to materially reduce its costs by a change in domicile."
	The tax regime in the UK has made it unattractive for some businesses to remain in this country, with an impact on corporate taxes, national insurance, employment taxes, pay-as-you-earn, VAT and other duties.
	The Chancellor, true to his Labour heritage, is proving himself to be an old-fashioned Labour Chancellor—taxing and borrowing more to pay for more spending. As my hon. Friend the Member for North Essex said, he needs to learn that in an increasingly global economy, higher and more complex taxes drive businesses from the UK, thus harming our economy and threatening future funding of public services. There is nothing in the Budget to demonstrate that he understands the challenge that we face. Indeed, the tax burden is forecast to rise by £5.5 billion, not to fall. When the competitive threat is pointed out to the Chancellor, he is astonishingly complacent about it.
	In the booklet about the future of financial services in London published with the Budget, the Chancellor boasts about the cut in corporation tax, but he does not tell readers that other countries have been cutting their corporation tax rates as well. That is why we now have the 10th highest rate of corporation tax among our competitors, rather than the 10th lowest, which he inherited from the Conservative party in 1997. On taxes, the Chancellor has failed to learn from his mistakes. He is stuck in the past, failing to act on the realities of a global economy, by not creating a tax system fit for the 21st century.
	This is the Budget of a Chancellor who is so dogmatic in the pursuit of his own ambitions that he ignores the evidence. He is stuck in the past, failing to learn from his mistakes, failing to adjust to the global challenges from India, China and eastern Europe and failing to tackles the skills issues and deal with our increasingly complex tax base. High increases in spending have not led to the step change in public services that our economy and our country need, because reforms have been blocked. Money has been wasted, and to finance that spending he has taxed so much that our competitive position has been eroded. He has spent too much, taxed too much and borrowed too much. He is the road block to reform.

John Healey: This has been a shortened debate, but in a series of time-limited speeches—there have been 15 from Back-Bench Members on both sides of the House—there have nevertheless been some important contributions. The themes ranged widely, but at the heart of the Budget and this debate on it, is the economy. As the Chancellor reported in the Budget, the British economy is stable, strong and strengthening. In each of his 10 Budgets, he has been clear that his first priority for the UK economy has been, is, and will remain, stability. The decisive macro-economic reforms that he introduced in 1997 to monetary policy, to fiscal policy and to the planning and control of public expenditure, were designed first to establish and then to lock in stability and steady growth.
	For 50 years, Britain's economy was prone to high and volatile levels of inflation. For 18 years under the Tories, until 1997, Britain was the least stable of the major developed economies—first in, last out, hardest hit by the recessions and world economic shocks. In contrast, in the Budget last week, the Chancellor reported that we have met our inflation target this year and in every year since 1997. In just a decade, long-term inflation expectations have virtually halved to 2 per cent. Today, long-term interest rates are the lowest that they have been for 40 years, at just 4 per cent. He reported that inflation is currently 2 per cent., which is on target. He reported that, in the latest quarter, the UK economy is growing at an annual rate of 2.5 per cent., which is on target. He reported on broad tax revenue projections since the pre-Budget report, which are on target, and he reported on public finance figures against our fiscal rules, which are on target.
	No wonder we heard so little from the Tories on the economy in this Budget debate and no wonder the Leader of the Opposition responded to the Chancellor with personal attacks and not criticism of policy—a mistake that the hon. Member for Fareham (Mr. Hoban) has repeated tonight. They have nothing to say of their own on how to reinforce the science, innovation and research base of Britain, how to tackle the threat of climate change—

John Healey: If the hon. Gentleman looks at the public finance figures, he will see that, by 2007–08, we will be spending £6.4 billion in capital investment in our schools. A high priority for that investment is science funding and science labs.
	I will talk about the speeches from Front-Bench Members first. The hon. Member for Brent, East (Sarah Teather) urged us to have a debate on policy priorities and to deal with the hard facts. There is nothing vague, as she put it, about the Chancellor's Budget commitments on education. First, there will be extra cash going directly to all head teachers from next month, with more to come next year. Secondly, there are hard figures on boosting the capital spending from £5.6 billion in our schools this year to £8 billion a year by 2010–11, matching in five years for our state schools the capital spend per pupil currently going into private schools. The hon. Members for Brent, East and for Havant (Mr. Willetts) asked about the new money that will go directly to schools. There will be £220 million in the next financial year and £365 million in the year after that to boost personalised learning. More will go to schools with the greatest need and those with the pupils who are the lowest achievers.
	One of the most important things that the hon. Member for Havant tried to do in his speech was to make clear the Conservatives' approach to the Chancellor's commitment on schools, but we still need clarity. As my right hon. Friend the Secretary of State said, when the shadow Chief Secretary to the Treasury was asked on Budget day about the implication of the third fiscal rule that the Conservatives had, she confirmed that the Tories would spend less on education than the Chancellor set out. When the Conservative Front-Bench spokesman, the hon. Member for Wycombe (Mr. Goodman), was asked during the winding-up speeches in the next day's debate:
	"Does his party support our goal to raise the level of state spending in schools up to the level of private schools",
	he said:
	"Of course we support the goal".—[Official Report, 23 March 2006; Vol. 444, c. 508.]
	I welcomed what the hon. Member for Havant had to say about schools, as far he could. He said cautiously and vaguely that he was happy to sign up to the aspiration. However, just to be clear, will he match the long-term pledge to raise the level of funding for pupils in state schools to that for pupils in private schools? Will he be clear that he will back our immediate commitment to do so on capital spending for schools by 2010–11, or does he maintain the policy of putting tax cuts first?

David Willetts: I thought that I had made that clear in my speech, but I will try to give absolute clarity. Yes, we accept the increase in school spending and the capital spending pledge. We need more information about the time scale for the aspiration, although, of course, we support it. For us, the crucial aspiration is to match the standards in private education, not just the spending.

John Healey: We have made progress since Budget day. Clearly the hon. Gentleman has disowned the comments made by his colleague the shadow Chief Secretary to the Treasury. My right hon. Friend the Secretary of State earlier described the Conservative party's policy changes as flip-flops, and I have to say that she was right. The situation should concern everyone. I guess that there are some people who want to believe what the Leader of the Opposition says and his promises, but, frankly, the fiasco of the policy flip-flops following the Budget shows that when the Tories are put under pressure and the going gets tough, they give in.
	The hon. Member for North Essex (Mr. Jenkin) was right to warn of the challenges in the global economy, just as the Chancellor did in his Budget speech. The hon. Gentleman was also right to say that we need to boost research and development. However, he spoiled his comments by talking about the tax burden. He knows that this Labour Chancellor cut the main rate of corporation tax, the rate of small business corporation tax and the rate of capital gains on business assets. He knows that the tax burden is still lower than it was at its peak under Baroness Thatcher in 1984. He also knows that, according to the OECD, the net direct tax burden for the average working family has halved since the Labour Government came into office.
	Other speeches made by Opposition Members shone little light on the policies that we could expect from a Conservative Government, but let me deal with as many contributions as I can in the time available. The hon. Member for Mid-Worcestershire (Peter Luff) freely admitted that spending on education has gone up under this Government. Whatever position he claims for Worcestershire pupils, they would have been—and would be—far poorer under a Conservative Government than the Labour Government of the moment.
	The hon. Member for West Suffolk (Mr. Spring) was right to raise concerns about regulation, but his overstated rhetoric spoiled his case. The Budget produced specific targets for Her Majesty's Revenue and Customs to reduce administrative costs in the tax system. It also included plans for further simplifications. Similar hard analysis and plans for the other areas of the Government in which he is interested will be published during the rest of this year.
	The hon. Member for Dundee, East (Stewart Hosie) called the Budget thin. He was especially concerned about attracting investment into the UK. Perhaps he could look at the publication "Science and innovation investment framework 2004–2014: next steps", which we published alongside the Budget, and in particular at page 66, which sets out the answer to his concerns. I am glad that he welcomes the Budget publication on consulting on the future of carbon capture and storage.

John Healey: I will not because I want to respond to other hon. Members.
	The hon. Member for Ludlow (Mr. Dunne) spoke with passion from his constituency perspective. I will ensure that my right hon. Friend the Secretary of State for Education and Skills responds to him on his point about further education for his constituents. However, he began by questioning the Chancellor's credibility—the same Chancellor who Alan Greenspan has described as "without peer" on economic policy making.
	The hon. Gentleman and the hon. Member for Hornchurch (James Brokenshire) criticised the Government on skills. The proportion of 16-year-olds achieving five good GCSEs or better has risen from 45 to 55 per cent. under this Government. Some 1 million adults have improved their literacy or numeracy skills under this Government. The proportion of adults with a degree has increased from one fifth to more than a quarter under this Government.
	My hon. Friend the Member for Huddersfield (Mr. Sheerman), who courteously said that he could not be present for the wind-ups, made an informed and expert contribution as Chair of the Select Committee on Education and Skills. My right hon. Friend the Member for North Tyneside (Mr. Byers) looked forward to the Government's response to the Turner report in a characteristically reflective, and rather broad and sweeping, contribution.
	My hon. Friend the Member for Coventry, South (Mr. Cunningham) set out a long-term concern about pensioners receiving further support, especially those who have been failed by their occupational pension schemes collapsing. My hon. Friend the Member for Burnley (Kitty Ussher) spoke about firms in her constituency and brought her national policy experience to explain how the Budget announcements may help them.
	My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) shares the Chancellor's passion for education, even if he does not share every detail of the Government's planned reforms. He told of us lessons in Scotland that could be learned in England. My hon. Friend the Member for Glasgow, North (Ann McKechin) was right about the Budget's theme, which is how Britain can meet the changing pressures in the world, and she was right to point to our contribution on climate change. My hon. Friend the Member for Northampton, North (Ms Keeble) was concerned to see young people in her area share in the greater investment that the Budget makes in sport. I will ensure that the Minister for Sport writes to her with further details so that she can see how that might take place.
	My hon. Friend the Member for Norwich, North (Dr. Gibson), who is Chair of the Science and Technology Committee, observed that the priority, plans and funding contained in the 10-year framework have never been seen in Britain before. My right hon. Friend the Member for Edinburgh, East (Dr. Strang) recognised the UK as one of the leading countries in dealing with climate change and rightly urged us to use energy more efficiently, not just in business, but in households and the public sector.
	As we enter the 10th year of a Labour Government, this is the 10th consecutive year of uninterrupted economic growth. It is also the 10th successive year that we have grown faster than the euro area. Not only has there been growth in every quarter in every year since 1997, but growth has averaged 2.8 per cent., a growth rate that is significantly higher than the average of the period 1979 to 1997, when it was at just 2.1 per cent—a period of government that left Britain seventh out of seven in the G7 for national income per head. Now Britain is second only to America in the G7. Now there are 2.4 million more jobs in the economy. Now there are more than 500,000 more firms in business and 1.7 million more home owners than in 1997, when Labour first came to office.
	The choice at the heart of the Budget debate is whether to cut planned public spending to cut taxes on principle, whatever the needs of the economy, the infrastructure and public services, or whether to invest to meet the long-term challenges that we must face in Britain: investment in science, innovation and skills, investment in tackling the threat of climate change, investment in the long-term infrastructure needs of the economy and, above all, investment in the talent and the potential of every one of our young people. As my right hon. Friend the Chancellor confirmed in the Budget and as my right hon. Friend the Secretary of State for Education and Skills said, education—
	It being Ten o'clock, the debate stood adjourned.
	Debate to be resumed on Tuesday 28 March.

Keith Vaz: I would like to thank you, Madam Deputy Speaker, for allowing me the opportunity to raise on the Floor of the House the future of the Community Legal Service.
	I am delighted that my right hon. and learned Friend the Minister of State, Department for Constitutional Affairs is on the Front Bench, and I welcome her to her new responsibilities. I am also pleased that the right hon. Member for Berwick-upon-Tweed (Mr. Beith), the Chairman of the Select Committee on Constitutional Affairs and other right hon. and hon. Members are in the Chamber. I was delighted when, as a Minister in the former Lord Chancellor's Department, I had the opportunity to attend the launch of the Community Legal Service in April 2000 by the then Lord Chancellor, my right hon. and learned Friend Lord Irvine of Lairg. This Saturday, it will be exactly six years since the establishment of the CLS, and it is important that Parliament should assess the service so far and try to map out its future.
	Last Thursday, after months of consultation on a paper entitled "Making Legal Rights a Reality" the Legal Services Commission, with impeccable timing for our debate, released its strategy document outlining the future of the service between now and 2011. In February, Lord Carter of Coles published his interim report on reforming the procurement of legal aid—we await his final report with great interest. I was pleased that last week on Budget day the Legal Services Commission took the opportunity quietly to inform its contract partners that it will review its decision to terminate funding of the specialist support services after a relaunched consultation is complete. I will refer to that announcement a little later.
	The great post-war Attlee Government identified three requirements for a just society—free state education; free health care; and free access to justice. Although the provision of the last requirement has generally had a lower profile than the first two it is no less important. Protecting the vulnerable and ensuring the legal rights of everyone requires an efficient, effective and co-ordinated legal service. The Legal Services Commission and the CLS were established under the provisions of the Access to Justice Act 1999. The vision behind the CLS was to ensure that everyone in society has access to justice through quality-assured legal advice, representation, education and information. It is not a single body or organisation—it is defined in terms of its purpose, which is to promote the availability of legal services in civil law, including all the organisations and bodies that fund or provide civil legal advice services, with the Legal Services Commission acting as guardian of the service. Although an exciting concept, its very structure poses serious practical difficulties.
	It is perhaps easier to describe the CLS as a near-equivalent in law of the national health service. Like the NHS, the CLS should allow everyone the opportunity to receive specialist advice according to their need. As in medicine, legal advisers specialise in different fields. Welfare, education, employment rights and family law are just some of the common areas that the service covers. For the client to be best served he or she should have access to the correct specialists. To continue the medical analogy, one would not go to see a dermatologist about a sore throat.
	There are several issues that I shall raise in the debate. After six years, the challenges and problems that the service faces can be clearly identified. Research from the legal services research centre shows that there likely to be over a million unsolved legal problems each year, and that only half of those with a legal problem choose to seek legal advice. Of those who do seek guidance, one in seven fail to receive any legal advice. It is also much more likely that if a client is facing one legal problem, they will also experience another related legal issue.
	The main challenges are the funding of the civil legal aid budget, the recruitment and retention of trained lawyers and advisers, the identification of the needs of the public, and the provision of a seamless legal advice service. The funding of the CLS has been identified as the most important concern of those working in the service. In spite of efforts to control spending, the annual legal aid budget has risen from £1.5 billion in 1997–98, to over £2.1 billion last year, a rise of approximately 40 per cent., or a 10 per cent. increase in real terms.
	Despite the rise, practitioners and consumers still complain that the sum is not enough to retain good lawyers or to provide a first class service. The £2.1 billion funding has to be shared with the criminal defence service, as well as funding the administration of the Legal Services Commission. In the past seven years, spending on criminal legal aid rose by 37 per cent. in real terms. As funding for civil legal aid is not ring-fenced, that rise has resulted in civil legal aid falling by 13 per cent.
	That has meant increasing pressure on legal advice providers in all areas that the CLS covers, and it is important that before the situation becomes critical, funding of the civil legal aid budget is put on a more sustainable and secure footing. This is a call not for unrestrained spending—obviously, there is a limit to the amount that can be spent—but to take forward proposals that can lessen the pressure on the service.
	Lord Carter seeks to provide a solution to the problems of funding legal aid. His recommendations include cutting the bureaucracy of the Legal Services Commission, and bringing in a market-based system for legal aid allocation and fixed-rate fees for certain types of cases. These proposals should be studied carefully. However, should the number of cases requiring criminal legal aid continue to rise, there will be a corresponding fall in the proportion of the budget allocated for the CLS.
	Unfortunately, Lord Carter did not put the recruitment and retention of current legal aid practitioners in the terms of reference of his report. The circumstances that the CLS faces in its efforts to provide legal advice have been well reported. It is a common sentiment of those working in legal aid that the system is facing a crisis, as more and more lawyers leave the service and fail to be replaced by younger newly qualified practitioners. Kevin Martin, president of the Law Society, has used such words as "meltdown" and "disaster".
	The implications for a member of the public wishing to receive specialist legal advice can already be seen. What are known as advice deserts are becoming more common. These deserts are areas in which few or no legal aid solicitor is available. For example, the town of Leatherhead has not one single legal aid solicitor, and in the whole of Kent there are no legal aid solicitors offering housing advice. This puts advice organisations such as the National Association of Citizens Advice Bureaux in an impossible situation.
	One bureau in the west midlands tried to advise a man whose ex-wife's new partner was in breach of a court order concerning access to the client's children. The client had a very real concern that his children were at risk from his ex-wife's partner, but the bureau was unable to find a community legal service solicitor within a 15-mile radius to help process an injunction. There are thousands of similar cases.
	We must be clear that the failure to retain or recruit new solicitors for legal aid work is not the fault of those solicitors. It is not the case that these practitioners wish to work only on cases that pay well. Many newly qualified solicitors are likely to emerge in the legal world burdened with debt. After seven years of study, many students graduate holding loans of over £20,000. A solicitor with a sense of social justice who practises wholly in legal aid is likely to earn less than a new recruit to the Metropolitan police. They must start paying back their debt and look to secure their future, but the amount that they would get paid under legal aid does not allow them to do so. We must wait for the final version of Lord Carter's report. I hope that it contains proposals on fixed-fee cases that are sufficiently attractive to halt or even reverse the decline in the number of legal aid solicitors.
	At the moment, two different services are attempting to cover the gaps in service left by those advice deserts. The specialist support service was created with organisations such as Shelter and the Child Poverty Action Group, and it includes people who have the relevant expertise to help those with problems in areas such as housing and family law. The tiny amount of £2.9 million a year is spent on the specialist support service, but, as my hon. Friends know, until last week the LSC had decided to terminate its funding. Last Wednesday, the LSC reversed that decision, and it will start a new consultation process, and I hope that the service and the consultation process will be improved. I welcome that U-turn and pay tribute to my hon. Friend the Member for Cardiff, North (Julie Morgan), who led the campaign to get the LSC to reconsider its decision.

Julie Morgan: I thank my hon. Friend for giving way and initiating this important debate. I know that he is as pleased as me that the LSC has reversed its decision on the specialist support service following the Constitutional Affairs Committee report. Does he think that that threat to the specialist support service showed the LSC's lack of understanding of the complex nature of the legal advice that is required? Citizens advice bureaux, other voluntary organisations and CLS direct need the back-up of the experts at the specialist support service to ensure that some of the most vulnerable people receive high quality legal advice.

Keith Vaz: My hon. Friend is right. As I have said, I believe that her leadership of the campaign resulted in the change. It is vital that we have a good consultation process, because if the consultation is good, the case will be made to keep the service going.
	The second service that was meant to relieve pressure on the community legal service is CLS Direct, which is a telephone and internet service that members of the public approach directly. In some cases, an individual will have a query that can be answered without the need to see a solicitor. Last year, more than 210,000 calls were made to the telephone service, with more than 500,000 visitors to the website. This afternoon, my office phoned CLS Direct on behalf of Mrs. Valerie Volpi, who has suffered a fall, to see where and how she could seek guidance. After two attempts, we got through the automated system and managed to speak to a human being. We were told that unfortunately it could offer advice only on debt, housing and welfare benefits, but that it could provide Mrs. Volpi with the telephone number for her local CAB.
	The system is too bureaucratic. I have used the website and found it to be satisfactory in the way in which it provides explanations of basic points of law. With improvements, CLS Direct could be a very useful service, although there needs to be a campaign to raise awareness of its existence. I was very disappointed to find at a recent Select Committee meeting under the chairmanship of the right hon. Member for Berwick-upon-Tweed that the acting chief executive of the LSC was unable to recall the number of the service, which is, for the benefit of the House, 08453454345. Although those services complement the work of the CLS, they cannot form a mainstream option for the provision of legal advice, because they will not be able to cope if the number of legal aid solicitors continues to decrease.
	The final area in which the CLS is under challenge concerns the clustering of legal problems. A survey showed that 46 per cent. of all respondents with justice problems reported two or more problems, of whom 47 per cent. reported three or more problems. Clustering can best be understood as a domino effect resulting from an initial legal aid problem. For example, a mother suffering from domestic violence due to her situation has a greater chance of becoming homeless, suffering poverty or experiencing other issues of family law. Of course, the longer it takes to deal with the initial situation, the more chance there is of its entering into other areas of civil, even criminal, law, requiring greater specialist knowledge, greater expense and the involvement of other authorities. Alternatively, situations can arise that immediately relate to several areas of law. It is incumbent on the Legal Services Commission to formulate a strategy that can quickly identify and deal with such cases to ensure a seamless service. That requires an holistic approach that has not yet been answered by the current network of CLS partnerships.
	In the five-year plan for the CLS that has just been published, the LSC informs us that it will abandon those partnerships and look towards the establishment and use of community legal and advice centres, which are intended to bring together specialists from a variety of legal fields to create a one-stop shop for legal advice.

Harriet Harman: I thank my hon. Friend for choosing the important issue of legal aid as the subject of this debate. I congratulate him on his speech, which I will draw to the attention of Lord Carter and which will of course be studied by the Legal Services Commission as well as by other hon. Members.
	I thank my hon. Friend for the warmth of the welcome that he has given me in my new portfolio of responsibilities. I particularly value it as it comes from him, as he has done so much in this House since 1987 consistently to raise the issues of access to justice and the vital part that good quality legal services play in that. I hope that he will bear with me, as I took over this portfolio of responsibilities only last week.
	Like my hon. Friend, I am in politics because I want to be part of the effort to tackle poverty and social exclusion. Like him, I represent a constituency where there are still problems of social exclusion. Like him, I regard it as important to ensure that my constituents have not only good schools and hospitals and a job, but their legal rights. We have tried—indeed, he has been part of trying—to make the law fairer. We have brought in laws which make things fairer for tenants, for employees, and for people who face discrimination. However, like him, I believe that there is only any point in those laws—and all other laws that exist to make society fairer—if everyone has access to good legal advice and the law is accessible to all. That has been our concern since we came into government in 1997.
	I acknowledge that, as my hon. Friend said, a great deal of unmet legal need continues to exist. Our concern about that was the basis of our introducing the Community Legal Service. Since then, I hope that there have not been too many legal initiatives, but several projects have tried to improve the quality of legal advice and assistance and get it to those who need it most. My hon. Friend mentioned CLS Direct. He is right that, as yet, it deals only with debt, housing and welfare benefits, but it already provides advice to 2,000 people a week. Many of those would not get legal advice in any other way. That applies especially to young people, who want to get advice and information on the internet. However, I agree with my hon. Friend that the service needs further publicity.
	We are also finding new ways to provide legal services so that, for example, we take them to where people are. That includes providing them at county court, where people face, for example, actions for housing possession, instead of expecting them to go to the lawyer's office. That helps 400 people a week throughout the country. My hon. Friend rightly said that we need a seamless service instead of making people go from pillar to post. That lies behind the one-stop shop service in Leicester that he and my hon. Friend the Member for North-West Leicestershire (David Taylor) mentioned.
	The number of people helped with legal advice for civil matters is 20 per cent. higher than last year, especially with housing, mental health, debt and benefit problems. However, I am not here to tell hon. Members that all is rosy. We know that there is more to be done and that there are problems to tackle. The Select Committee on Constitutional Affairs highlighted those.
	One of the problems is that less money is spent on legal aid for family and civil cases now than in 1997. As my hon. Friend the Member for Leicester, East said, the overall legal aid budget has increased from £1.5 billion in 1997 to £2.1 billion this year. However, that increase has been taken up with extra spending on criminal legal aid, which has increased from £734 million in 1997 to £1.169 billion this year. That is a 37 per cent. real increase against a background of a fall in the number of criminal cases.
	However, the amount spent on civil and family legal aid has gone down from £755 million in 1997 to £722 million, which, when one takes inflation into account, is the equivalent of a £200 million—or 22 per cent.—real terms cut. That is one of the reasons why we have asked Lord Carter, to whom we are grateful, to review legal aid services. We are not simply waiting for his final report. We have already introduced the Criminal Defence Service Bill and tighter controls on the high cost criminal cases.
	Our aim is to have a properly funded criminal legal aid system and to ensure that the civil and family system gets a larger share of the overall legal aid budget. My hon. Friend raised the important issue of specialist support services. He rightly paid tribute to my hon. Friend the Member for Cardiff, North (Julie Morgan), who raised the matter not only in the Select Committee but in the Lobby with me on several occasions. She actively pressed that important point and I can confirm that the Legal Services Commission has committed itself to continuing to fund specialist support services while it undertakes a proper consultation on the future.
	I shall, of course, ensure that I keep the House regularly updated on the progress towards our shared objectives and I look forward to working with my hon. Friend the Member for Leicester, East, the Chairman and other members of the Select Committee, and many others who are interested in that important issue.
	Question put and agreed to.
	Adjourned accordingly at twenty-four minutes past Ten o'clock.